Repealing the Factors Act 1889

It is important especially in the commercial field that English law is modern and up to date. One piece of legislation that is particularly obscure not helped by the Victorian drafting is the Factors Act 1889 (‘1889 Act’). This piece of legislation can only be understood against the historical background of who factors were, and why they were accorded with legal privileges more extensive than other agents. The purpose of this article is to trace the history of factors. Also, to assert that the 1889 Act should be repealed. And, that factor’s liens (particular and general) should be abolished.

o Instead, it made it a presumption of law that a factor had ostensible (presumed) authority to sell, consignor pledge another's goods even though the owner had not expressly confirmed this. This reflected the older position of the factor being more a partner than a simple agent. It also reflected the reality that the factor, often, did not know who was the owner of the goods sinceespecially in the corn and textile trades -they were, usually, intermixed. 6 Further, it was (often) difficult -as a result of the geographical distance -for a factor to secure instructions from his principal; o Today, the law on partnership and agency is well developed, goods are clearly identified and it is easy to obtain instructions. Also, today, the vast majority of agency relationships are based on express or implied authority (which includes where a trade custom is implied into the agency)as opposed to ostensible authority. This not only helps protect innocent third parties, it reflects modern commercial practice. Thus, nemo dat exceptions in the case of sales and pledges by factors pursuant to the 1889 Act should no longer be upheld. They are unnecessary;  No Factors Left? A factor was an agent (usually a rich, individual merchant): (a) in possession of another's goods (or documents of title to the same); (b) who held himself out as the owner; (c) acting in the ordinary course of his business in certain trades -such as domestic sales of corn and textiles as well as in the import and export of foreign goods, especially from the East and West Indies.
o As a result, it was reasonable to assume that persons dealing with factors in these trades -as a matter of business custom -would know they were selling, consigning or pledging goods on behalf of an undisclosed owner. The pre-requisite of (c) was preserved in the Factors Act 1889, s 1 which refers to 'a mercantile agent having in the customary course of his business as such agent authority…to sell goods etc.'; 7 (underlining supplied) order to help finance the Crown 43 and there was a greater availability of coinage, which increased trade and mobility; 44  There were great trade fairs on the Continent and in England, bringing foreign merchants (and their business practices) here; 45  The Catholic church owned large estates and their abbots and monks were (often) assiduous in business, acting through agents. 46 This was especially so in the wool trade. Ecclesiastical law also developed the use (trust). That is, the holding of property for the benefit of another. This may have originated with the Franciscan order, enabling it to retain property and, yet, meet (in its view) its vow of poverty. 47 Thus, Plucknett saw the bailiff as the precursor to the factor, noting that the factor's obligation to account in law (likely) derived from him. He stated: In the course of his history the bailiff has…covered a great deal of ground. We first made his acquaintance as the key man in the country's greatest industry, agriculture, and we have seen him trading with his lord's goods and receiving his lord's moneys on so vast a scale that the common law was compelled to make room for him by giving the action of account, and by cautiously accepting the principles which lords, bailiffs and auditors were working out in the less formal atmosphere of rendering account out of court. Just as the action of account was to become the remedy for the professional merchant and his partners, so the principles which it embodied served the purposes of the trader and the factor. 48 For his part, Lord Stowell, in The Matchless (1822), stated as to the origin of the term 'factor': I believe it has a French origin in the word 'facteur', and, in common parlance, it continues in a sense of great latitude to signify any agent whatever. In the northern district of this island, it is very generally applied to land stewards, bailiffs, and managers of estates. 49 It is possible, therefore, that the concept of the 'factor' derived from the bailiff on a manorial estate. As a result, when Fleta (c. 1290) was writing about the bailiff and his selling of manorial produce (as well as his making a profit thereon), 50 his sentence indicates the beginnings of agency. Further, the medieval bailiff of a manor, in many cases, was closely connected to the wool and textile trades. In particular, up to the 13 th century, manors and villages tended to be self-sufficient. Thus, housewives wove their own cloth. However, by the 13 th century, weavers were establishing themselves in villages 51 and developing trade there, subject to the control of(or inter-acting with) the lord of the manor.
In conclusion, the factor may have originated from the bailiff of the manor. 43 Beardwood, n 34. By the time of Edward III (1327-77) the involvement of foreigners in finance in London was extensive -especially in the wool trade which was so essential to the English economy. This is reflected in the staple system. See McBain, n 1, part 1, s 16 and G Unwin (ed), Finance and Trade under Edward III (1918) especially pp 93-135, The Societies of the Bardi and the Peruzzi and their Dealings with Edward III, 1327-45. Edward's grandfather, Edward I (1272-1307) had also extensive involvement with foreigners, being in financial thrawl to Lombard merchants, who acted as his bankers although, in the Calendar of Letter-Books preserved among the Archives of the Corporation of the City of London at the Guildhall' (printed by order of the Corporation under the Direction of the Library Committee), Letterbook C (1291-1309), n 79, intro, p ix, the editor (Sharpe), noted 'The favour shown by Edward [I] to foreign merchants, although springing out of necessity, rather than from any special liking he entertained for them, was, nevertheless, distasteful, to the London citizen.' 44 Until the reign of Henry I (1100-35) there was little money. Thus, a large amount of trade would have been barter (exchange). Henry I commuted payments to the Crown into money, as opposed to supplying food and other provisions. Manorial services and rents also, gradually, began to be commuted as lords realised that money was easier to handle. Ashley, n 21, p 32 'It has not hitherto, I believe, been noticed that the appearance, about the middle of the thirteenth century, of bailiff's account-rolls, containing a list of all the receipts and expenses on the demesne, was the result of the changes which substituted money payments for labour.' See also Ibid, pp 46-7, 49. 45 McBain, n 1, s 13. 46 e.g. William of Cause-an official royal merchant who also served as Mayor Lincoln in 1298 -acted as the factor (or his son did) for Welbeck Abbey with regard to their purchases of wool at Boston fair in 1290. See

(b) Factor -Active Business Partner
However, while the concept of 'factor' may have derived from the bailiff, it may also have derived from the Italian term 'fattore' and that it referred to Italian, and other Continental, merchants (including the Flemish) who came to England -especially from the time of Henry III (1216-72) and, more so, in the reign of Edward I (1272-1307). 52  These merchants bought, and sold, goods for their own account. They also acted as agents for others, such as the sovereign and rich churchmen, monasteries, merchants and townsmen -buying and selling their goods;  Further, in medieval times, Italians developed various forms of partnership. 53 This influenced the situation in England since Italian traders were so prevalent here.
As Postan noted, there were, roughly speaking, three types of Italian partnership. 54 One of these was the commenda of which he stated: The commenda was a contract of 'sleeping' partnership, by which the commendator, or the sleeping partner, delivered goods or money to the tractator, or the active partner. The chief characteristics of the commenda were that the commendator contributed capital and no labour, while the tractator contributed labour and no capital; that the goods as a rule remained the property of the commendator; and that it was on his behalf and to his use that the tractator was supposed to be trading. The commenda was consequently employed most frequently as a labour partnership, and the 'labour' was frequently that of a 'factor' or 'commissioner'. A merchant who had goods to sell at a distant place and could not go there himself, entrusted them to another person to do so on his behalf. Indeed sometimes the commenda was merely a societas-like form of ordinary hire of service. A merchant engaging a servant in a managerial capacity would very often conclude with him a contract of commenda, in which the goods or the funds of the business constituted the stock managed by the tractator. 55 52 America, 1948), p 11 'Professional money-lenders did not appear in Flanders until the end of the thirteenth century, when the Italian merchant and banking houses began to establish permanent branches in Bruges and to desert the fairs of Champagne. This migration of the Italian merchants to Flanders is an important development, because it meant the end of travelling or caravan trade, which centred around the fairs of Champagne, and its replacement by a more efficient form of organisation. Henceforth, merchants ceased to visit the fairs and began to conduct all their business from the counting-house, using partners, factors, or correspondents to represent them in foreign parts. ' Ibid,p 29 'In view of the slowness of medieval communications, to conduct foreign trade from behind a desk presented a stupendous problem of organisation, planning, supervision, and management. The old solution was for the merchant to secure permanent representation abroad either through partners, factors, agents, or correspondents. Goods were sent to them on consignment as much commodities were sold neither according to sample nor according to description, but after inspection by the prospective buyer.' 53 FR Sanborn, Origins of the Early English Maritime and Commercial Law (1930), pp 202-3 'In a number of the Italian cities [in medieval times, factors] were liable for the principal's debts, and they could also conclude contracts binding on him, so that in mercantile usage 'factor' and 'socius' had about the same significance….In Italy it was customary for the young merchant to go abroad for a time as a factor, in order to learn the principles of his business, returning home later when he had travelled and was experienced.' 54 Postan, n 31, p 68 'The Italian sources distinguish, roughly speaking, three chief types of partnership: the commenda, the collegantia (societas maris) and the compagna. ' (1904), pp 124-8 'During the Middle Ages contracts of partnership were common…In the early centuries the most common form of partnership was the 'commenda'. This was a partnership in which one of the parties supplied the capital either in the shape of money or goods, without personally taking an active part in the operations of the society, while the other party supplied none or only a smaller fraction of the capital and conducted the actual trade of the association…Its popularity was due to the fact that it enabled the capitalist to turn his money to good account without violating the canonical laws against usury, and the small merchant or shipper to secure credit and to transfer the risk of ventures to the capitalist…The commendator…was a kind of sleeping partner, and it was left to the 'tractator' to carry out all the necessary operations....As a rule the commendator who supplied the capital took the risk of the transaction; if the goods were lost he could not recover the amount he had advanced, provided that the contract contained the usual clause 'ad risicum et fortunam dei, maris et gentium', or its equivalent. The usual share in the profits of a tractator who brought no capital into the partnership was a quarter, while in the case where he contributed to the general fund, his share of the profits amounted to a half. It is hard to tell whether the 'tractator' in early times always traded in his own name, though there is no doubt that in later times he did. Pertile [Storia del Diritto Italiano 1896-1803] holds the view that originally the tractator was regarded as a mere factor of the commendator who was responsible for the acts of the tractator, but that gradually in the course of time the principle was established that he was only responsible to the amount of the capital which he had advanced.' 55 Ibid. Also, p 68 'It is possible that with the development of the law of agency, the commenda might have been used merely in order to relieve the principal from the full responsibility for his agent's action on his behalf. The importance of this motive, however, ought not to be exaggerated, for the responsibility of the commendator for the actions of the tractator who was his factor, was not always and not everywhere different from the responsibility of a principal for the actions of his servant.' Postan also pointed out that: Common law, and to some extent even the customary law of English towns, did not recognise the sleeping partnership as such. Where and when the sleeping partnership was one of service, the remedy in common law lay in the various actions which applied to the relation of master and servant: mainly that of 'action of account' by which the master could sue his servant or bailiff to render account for the goods or property entrusted to him. In this way the common law and most of the urban laws assimilated the legal position of the commendator to that of a master or a landlord and that of a tractator to that of a servant or bailiff. When the societas fulfilled the purposes of investment, the legal remedy lay in the action of 'debt' as well as in that of 'account', and thus the parties were disguised as ordinary debtors and creditors. 56 Thus, what -to later legal eyes -was a master-servant relationship was, actually, more of a partnership, as a review by him of early Chancery records revealed. 57 Further, a formal contract of partnership was not required, since English law recognised the use (trust) which protected the ownership of the goods handed over to the factor. 58 A text Postan did not note, but which is also of interest, is a treatise on commercial matters by an unknown author, written c. 1280, called Lex Mercatoria. 59 It referred to the liability of apprentices and under-merchants. Thus, it stated that: It often and commonly happens that apprentices and under-merchants [submercatores], [those] who publicly and openly trade under the control of their masters, cause money, goods, and merchandise to be lent for consumption, or sold on credit [accomodari], to them to the use of their masters. The lenders would deliver no goods at all to such apprentices and [under-] merchants if they were on their own and not with such masters… In this case it is ordained that the masters of such apprentices and under-merchants should answer in the same way concerning goods and merchandise of this sort delivered to them in any way whatsoever by the hands of such apprentices and under-merchants, as if they themselves had received the same goods and merchandise by their own hands. But this applies on condition that these apprentices and under-merchants are known to serve and trade openly under the control of their masters and with the same masters' goods before and after such a loan or delivery or, at least, at the time of such a loan and delivery. 60 It would seem likely that the reference to 'under merchants' (which one takes to be a reference to persons operating pursuant to a contract of partnership or commenda), 61 refers to factors and not just to casual servants selling the goods of their master. 62 Further, the reference to 'control' indicates that the goods were not 56 Ibid, p 72. Postan also noted that, in the case of England, p 82 'Commenda-like arrangements, employed for the function of 'service' were assimilated to ordinary relationships of master and servant; commenda-like arrangements for the power to loan were assimilated to ordinary loans or trusts, but commenda partnerships they nevertheless were.' 57 Ibid, p 74 'the records…reveal numerous arrangements between parties which were much more regular and continuous. Inmost of these regular 'commitments' of goods, the 'commissionaries' were described as 'servants' or 'factors' but we must be very careful not to take the medieval appellation of 'servant' at its face value. Sometimes the tractator was indeed an ordinary servant, but in the great majority of cases the words 'factor' or 'servant' were employed to describe the relation of agents and principals. The so-called 'servant' or 'factor' might be an independent merchant, sometimes of greater substance than the so-called master; very often, as we shall see further, he was his partner….We must, therefore, be very careful not to take the medieval appellation of servant in its modern sense. When a person in a managerial capacity was described as a 'servant' he was often a merchant in the position of a tractator in a commenda.'Postanalso noted that 'junior partners commonly described themselves as the 'servants' of their senior partners.' 58 Ibid, p 82 'As Maitland rightly pointed out, the phrase 'to the use of' was the untechnical designation of a trust: to possess goods 'to the use of' somebody else meant to hold them on trust. And this probably explains why the societas-like nature of these arrangements was not insisted upon in England. The early development of the English 'trust' made it possible to 'commit' goods to other persons without the risk of losing the rights of ownership over them…Here goods could be safely given over in a commenda, without a formal contract of partnership.' For the use, see also Fisher, n 47, pp 403-16. 59 Basile, n 20. 60 (if in the hands of the owner at all times, the middleman involved in their  sale would have been designated a 'broker' (see (d)).  Finally, the word 'factory' referred to trading stations (also called, commercial settlements) where factors (agents trading with the goods of others) were located. 64 For example, the Steelyard in London which was the exclusive trading stations for German (hanse) merchants for many centuries. 65 Or, the English settlement in Danzig where English agents traded with goods sent to them by English merchants from England. 66 In conclusion, the factor probably originated from the Italian fattore. That is, an agent entrusted with another's goods (or money), pursuant to a partnership arrangement.

(c) Conclusion -Derivation of Factor
One would suggest that, in later medieval times -that is, from c 1290 onwards -the word 'factor' was less a reference to an (old style) land steward as such. Instead, it was much more to a person who acted as an agent for another (often, another merchant or a lord). Further, this relationship was akin to partnership. Thus, the commission of the factor was more in the nature of profits from his being the active partner in a business relationship than a fixed charge for acting as an agent. However, in legal terms, the role and responsibilities of the factor were treated as analogous to that of a servant (even though the factor might be much richer than his principal) since the courts had not yet developed legal principles of agency and partnership; this only occurred much later. 67 This role of the factor may be seen from the following instances:  in 1291, the Barons of the Exchequer were ordered to hear an action between an Italian merchant (Gettus Honesti of Lucca) and Peregrin (son of Gerardin of Chartres) in which the latter pleaded that he was not a factor; 68  in 1323, Alice (widow of Robert Podifat) was summoned before the Mayor and Aldermen of the City of London to answer for wheat sold to her factor. 69 In both these cases, the person was termed a factor, and it was likely the latter was more than a simple servant. Postan cites other cases where persons in the cloth and wine trades were using 'factors' who were more than servants. 70 Rather, they were business agents, 71 the master investing goods (or money) with them, for them to trade with. 72

(d) Broker & Factor
At some stage, a distinction was drawn between a 'broker' (also, called a sales broker or a middleman) and a 'factor'. Both were agents. However, the broker did not have possession of the goods of his principal. Nor did he present himself as their owner. Contrariwise, the factor did have possession of the goods and he, usually, did not disclose he was not the owner. This is explicable since the factor was much more of a partner than a simple agent and, also -in many cases -he would not know who was the owner of the individual goods. Further, while the broker received a fixed fee (commission) for each deal, the factor's commission was larger, reflecting his amplified function. Sanborn noted as to the broker: During the Middle Ages the brokers attained to a very important position on the Continent. Usually limited in number, required to be of good character and repute, they were appointed and sworn in by the municipal magistrates or by the gilds. Their existence was often in the interests of the local monopoly, whenever it was required that strangers should arrange their sales through them. In some cities it was forbidden to everyone to contract directly and it was required to contract through the brokers, contracts otherwise made not being binding….Their fees were legally established by tariffs and they had their own gilds... In order to preserve impartiality neither the merchant nor a merchant's partner [factor] could be a broker, and a broker had to declare to the parties concerned any personal interest that he might have in a transaction. 73 Brokers were prevalent at fairs, which became very popular in England in the 13 th century. Moore states: Another active figure at fairs was the sales broker….As they did in most major towns in England and the Continent, brokers at the great fairs effected sales, purchases, or exchanges for merchants, but the relationship of a broker with any given merchant was limited to the terms of the transaction, for which he was paid a fixed fee…In the records of fairs, brokers are associated especially with the trade in cloth and wool, although they were employed in sales of other commodities as well, as they were in London and elsewhere. It is not clear whether their services were mandatory in the cloth trade, but certainly their activities were heavily regulated by various authorities. 74 In conclusion, brokers were middlemen, paid to negotiate sales, without the possession of the goods or claiming to be their owner.

(e) Licensing of Brokers
Unlike factors, brokers would have been closely regulated from an early time in England. This reflected the marked tendency of English medieval society (like the Romans) to be suspicious of 'foreigners' (that is, outsiders or forenseci). 75 Any man who was not a citizen of the town who paid scot and lot (local rates and charges) was taken to be a foreigner, even if he did not come from abroad. It also reflected the gild system which was one of monopoly (restrictive trade practices), seeking to concentrate all trade in local merchants and to charge extra for foreigners becoming involved in the sale of goods. Brokers were regulated in many cities and towns and London was one of the first. Such brokers were required to be involved in every sale of goods not made between citizens of the City of London and they took a commission for this. They were licensed both to ensure honesty and to ensure that any toll imposed on the sale was collected. Also, their experience was needed since being expert in, for example, the sale of wine or leather or cloth, they could ensure that local citizens were not cheated in respect of the quality or adequacy of the same.  As to when licensed brokers (also called correctors) were first required in London, it is unclear through a lack of data on the original customs of London. However, it may be noted that London was granted the status of a 'commune' in 1191, with the result that the indicia of self-government would, likely, have arisen not long after;  The customs of the City of London are contained in works such as: the Liber Albus (  As for foreign merchants, they had considerable restrictions imposed on them. They were allowed to warehouse their goods in the City, but they were not allowed to keep hostel (unless they were freeman and able to produce good credentials) 86 and they could only stay for 40 days. 87 Nor could they sell by way of retail -since this was only permitted to freemen -and they were fined if they did. 88 Indeed, Constitutions of 1319 -as well as a charter of 1376 of the City of London -expressly prohibited foreigners from selling by retail; 89  Because of such restrictions on foreign merchants and other strangers (i.e. non-citizens), there was often 'colouring of goods' by freemen. That is, his avowing their goods belonged to him. 90 This may have assisted in the rise of the factor as a means of getting round these restrictive trade practices against foreigners.
It is noteworthy that -in the Letterbooks and other memorabilia on the City of London -there is little reference to the 'factor' 91 and he does not seem to have been licensed, unlike the broker.  This suggests that the broker came first, assisted by the lack of mention of the factor in texts such as Bracton (c.1240), Britton (c. 1290 and Fleta (c.1290); 92  It also suggests that the word 'factor' may have been the anglicisation of the Italian word 'fattore' (or the French equivalent 'facteur') and that it was used as a general expression to refer to those who possessed the goods of another and who sold (or consigned) them pursuant to a partnership type of arrangement. 93 As foreign factors were displaced by English ones they, probably, adopted the same title and trading customs. Thus, a notarial document in 1447 witnessed that one Geoffrey Wolleman, a London merchant, held letters patent to ship 600 sacks of wool from London and Southampton through the straits of Morocco, and that Wolleman: appointed John Maldon, grocer, his deputy, proctor, agent, factor, executant of his business and special messenger, to ship the said sacks and carry them beyond the straits of Morocco, to receive all goods and 86 Letterbook C, n 79, introduction, p ix. 87 Calendar of Letters, n 81, p ix 'The citizens of London…compelled the foreigner to sell by bulk or in gross, and then only to citizens and within forty days, and after exacting a tax for the liberty of trading at all, towards the support of the burdens of the town.' Foreign traders from certain nations, such as the Hanse of Almaine (also called the 'Emperor's men' or 'Easterlings'), see n 65, were granted greater trading privileges by the sovereign. 88  This lends credence to the factor being an amplified agent; one who was not a middlemen -licenced to negotiate and effect sales in accordance with London and other regulations -but, rather, a person in a partnership, playing the role of the active partner, trading with another's wealth and goods. 96 Further, the express authority given to a factor 'to sell, alienate, utter and trade' with the principal's goods 97 evidences why the courts were, later, to presume (as a matter of law) that the factor, per se, had authority to sell and consign the goods of his principal in general, without securing express consent for each specific transaction.
In conclusion, brokers were licensed from, at least, 1275 if not considerably before.

(f) Legal Position of Factors -Servants
The Ordinance of Edward I of c. 1285 (see (e)) also stated: if it so happen that any servant or apprentice of a man of the city [i.e. freeman of the City] shall buy goods of foreign merchants or others, and shall carry such goods unto his master's house where he is, his master shall be answerable unto the said merchant for the value of the goods aforesaid, if the merchant can prove that such apprentice or servant was [living] with the said master when he took the merchant's goods, and that the goods in his house, or elsewhere in his possession, have come into the hands of the master aforesaid. 98 The fact that this did not specifically refer to a 'factor' suggests that, in 1285, the factor was not a term of art, However, a Yearbook case 99 indicates that a factor, by 1329, was liable to account -the same as a bailiff or other servant. 100

SUMMARY -POSITION BY 1300-1320
It is asserted that, by 1300-20, there were fairly clear categories of traders. There was the:  merchant. He bought, and sold, goods as a profession, trading on his own account;  factor. He was an amplified agent (more equivalent to our modern day partner) -being the active partner in a relationship, trading with the goods (or money) of others, to make a commission which comprised more than a fixed charge, being a share in the profits. o He was especially prevalent in trades -such as the wool, cloth and corn trades -where his skill was required in determining quality and in negotiating a fair price; 94 OED, n 2 (utter) 'To put (goods, wares, etc) forth or upon the market, to issue, offer, or expose for sale or barter; to dispose of by way of trade; to vend, sell.' Also, 'Of goods. To find purchasers.' Likely, this was an archaic reference to the word 'sell'. See Johnson, n 2 (utter) '3. To sell; to vend.' 95 Memoranda (1437-57), vol 5, n 80, p 98. Wolleman gave all his goods and chattels to Maldon and others in 1447. Such gifts seem to have been common in business circles andthey were also given by foreign merchants to London citizens. They comprised a form of charge without the need to part with possession. Ibid, pp xxii-viii. And, they, likely, comprised part of a trading partnership (commenda). See also Memoranda (1458-82), n 80, p 149 et seq. 96 Postan, n 31, p 78 'They [the goods] were not delivered, as in the case of commissions, merely to be sold on behalf of their owner, but to be turned over, to be employed continuously over a certain period of time. When a merchant received a stock 'to traffick withal', he thereby assumed the right of full discretion over its employment, and was, therefore, either a 'servant' in a managerial capacity, or else an independent entrepreneur accepting an investment.' 97 Ibid, p 75 cites a late 15th century Chancery petition which refers to 'sell and utter and yeld [yield]'. See also Ibid, p 79 (entrusting of stock). 98 Ibid, p 249. It continues 'And this Ordinance is made, by reason that people of the City sometimes, after such manner of goods so taken by their servants, and by their apprentices, have been in the habit of discharging their apprentices and their servants and disavowing their acts, but of retaining the goods; whereby the merchants have lost their goods without recovery.' See also Basile, n 20, p 112. 99 3 Edw 3 pl 13 fo 5a-b, Seipp no 1329.013 (R brought a writ of account against J and counted that J had received 200 pounds from him, to profit to his use, and to account for this, and he showed a deed in counting that proved the receipt). Translations of many of the 22,000 cases in the Yearbooks have been published online by professor David Seipp in an Index, www.bu.edu/law/faculty/scholarship/yearbooks). 100 Postan, n 31, p 68, n 7 'the responsibility of the commendator for the actions of the tractator who was his factor, was not always and not everywhere different from the responsibility of a principal for the actions of his servant.' Ibid, p 72 'Common law, and to some extent even the customary law of English towns, did not recognise the sleeping partnership as such. Where and when the sleeping partnership was one of service, the remedy in common law lay in the various actions which applied to the relation of master and servant: mainly that of 'action of account' by which the master could sue his servant or bailiff to render account for the goods or property entrusted to him. In this way common law assimilated and most of the urban laws assimilated the legal position of the commendator to that of a master or a landlord and that of a tractator to that of a servant or bailiff. o He acted on a regular basis and, thus, maintained a running account with his principal(s) who were investors, being rich persons (such as nobility, ecclesiastics, townsmen, merchants); o He was appointed orally or, more often, pursuant to a 'letter of commission.' The latter was, likely, a translation of the Italian the contract of 'commenda' (investment), the factor also, often, being called a 'commissioner.' 101 His relationship with the principal can, perhaps, best be described as a financial partnership; 102  broker. He was a 'simple' agent -a middleman paid a fixed fee for a specific transaction. He was employed due to his expertise in the sale of certain goods, such as wine, leather, textiles etc. He was licensed in the towns where he operated. In the case of London, licensing occurred, at least, by 1275 but, probably, from much earlier. Possibly from 1191 onwards;  servant. He was a mere employee, on an annual salary, entrusted to buy, and sell, goods as instructed by his master.
One would suggest that the distinction between the terms 'factor' and 'broker' were not, legally, clear cut by 1290.  If the origin of the word factor is 'fattore' is correct, 103 then (likely) in 1290 and before, it was a term colloquially used -at first -to describe Italian and other foreign merchants who were selling goods in England as if they were their own, for foreign principals;  It was only when local merchants became involved as agents acting for others on a partnership basis (similar to that of the Italian commenda) that they also became known as factors.
There was also, likely, a benefit in keeping things 'hazy'. Since foreigners could not sell by retail, it enabled a local citizen -acting as a factor for the same (and taking a commission for his services) -to represent himself as the owner of the goods and to (effectively) 'colour them' without risking the loss of his freedom of the City or town.

HISTORY OF THE FACTOR: 1290 -1622
The idea that English foreign commerce was -almost completely -in the hands of foreigners until the 14 th century was challenged by Lipson 104 who asserted that the English began to push foreigners out from many trades prior to then, including trade in the principal English commodity -wool. The result was that there were less foreign factors and more local ones. Given this, it might have been expected that local factors would resort to the English courts, in the case of disputes. And that, therefore, there would have been a considerable number of cases. However, as Holmes noted, there were few legal cases on the undisclosed principal in early times. 105 This, though, is not really 101 Ibid. Also, p 69 'the commenda…was essentially a contract of investment.' 102 Ibid, p 69. 103 See 3(b). 104 Lipson, n 89, p 567 'It is often assumed that English foreign commerce was almost completely, if not altogether, in the hands of aliens, at any rate until the fourteenth century was far advanced. But there are grounds for believing that the extent to which English merchants carried on oversea trade, and competed with aliens in earlier times, has been greatly under-estimated. ' 71], and the chief one for a good while after, was debt, and that this was founded on a quid pro quo received by the debtor. Naturally, therefore, the chief question of which we hear in the earlier books is whether the goods came to the use of the alleged debtor.' Holmes, Ibid, p 390, cited YB 27 Edw 3 Lib Ass pl 5 fo 133b (1353), see Seipp Index no 1353.130 ass for the proposition that 'It always seems to have been recognised that an agent's ostensible powers were his real powers'. Seipp records the case as 'A poor man sued a bill of trespass against W. of W., serjeant of arms, of a horse and an ox wrongfully led away (amene). He pleaded not guilty. It was found that the bailiff of W. had sold the horse to the plaintiff for certain money (den's), and that W. when he came into the country re-took the horse. It was asked of the jurors if the bailiff was acknowledged as his bailiff, and they said yes, and he had sold other animals at the market. It was asked if he had special warrant to sell the horse, and they said no. In right of the oxen it was found that the bailiff had pledged the ox to the plaintiff for 12 bushels of wheat, price of 12 shillings, so that if he did not pay, the plaintiff would have the ox. It was found that the wheat came to the profit of his master, and his payment was made, and as to the one and to the other the plaintiff recovered his damages.' Holmes also cited 1

(a) Act of 1353
An Act of 1353 provided that: no merchant or other, of what condition that he be, shall lose or forfeit his goods nor merchandises for the trespass and forfeiture of his servant, unless he do it by the commandment or procurement of his master, or that he has offended in the office in which his master has set him, or in other manner, that the master be held to answer for the deed of his servant by the law-merchant, as elsewhere is used. 108 As Holmes pointed out, in this period, the powers of the agent were his ostensible powers. He stated: A man is not bound by his servant's contracts unless they are made on his behalf and by his authority, and that he should be bound then is plain common sense. It is true that in determining how far authority extends, the question is of ostensible authority and not of secret order. But this merely illustrates the general rule which governs a man's responsibility for his acts throughout the law. If, under the circumstances known to him, the obvious consequence of the principal's own conduct in employing the agent is that the public understand him to have given the agent certain powers, he gives the agent those powers. And he gives them just as truly when he forbids their exercise as when he commands it. It always seems to have been recognized that an agent's ostensible powers were his real powers; and on the other hand it always has been the law that an agent could not bind his principal beyond the powers actually given…There is, however, one anomaly introduced by agency even into the sphere of contract, -the rule that an undisclosed principal may sue or be sued on a contract made by an agent on his behalf… 109 (italics supplied) This presumption in law that a factor had ostensible authority to sell, or consign, the goods of his principal was noted by Catesby JCP in Wellys v Robynson (1484): if I deliver goods to one to trade (pur merchandiser) for me, by this authority he can well sell the goods, and distribute (them) at his pleasure (pleasir). 110 Postan cited examples of expressions in contracts with factors that the factor use 'his best avail' or 'do his best' or 'sell as he would have sold his own goods' and noted such formulas were similar to those employed by Hanseatic merchants in their instructions. 111 Since Hanseatic merchants had a long history in England -they received a charter to occupy a trading station in London (a factory, the Steelyard) as early as the time of Henry III (1216-72), master is not chargeable. But if a servant usually buy for the master upon tick [i.e. on credit], and the servant buy some things without the master's order, yet if the master were trusted by the trader, the master is chargeable.' Also, Nickson v Brohan (1711) 10 Mod 109 (88 ER 649) (if a master send a clerk, who has the general management of his cash concerns, with a note to the banker to receive the money, and the servant, instead of so doing, gets another person to give him a draft upon a banker for it, and the banker fails before the draft is presented, the master is liable for the loss).' 106 See McBain, n 1. 107 Ibid.
108 27 Edw III stat 2, c 19 (rep 1863). 109 Holmes, n 105, p 390. 110 YB 2 Ric 3 pl 39 fo 14a-15a, Seipp no 1484.039. The case concerned an asserted bailiff (factor) selling the goods (cloth) of his master and his duty to account. The fact his master was not a lord of the manor did not detract from his duty to account according to Catesby JCP 'I say that there is no distinction between one who is bailiff of a manor and of a house.' Thus, a factor was treated the same as a bailiff, vis-à-vis a liability to account for the principal's goods. For an earlier case of a factor, see Tamworth and they had traded in England long prior that 112 -it seems possible that English factors adopted Germanic forms and this is the origin of the factor's ostensible authority to sell or consign the goods of the principal. In short, anyone in medieval times dealing with Hanseatic merchants -as well as with Lombards and other foreign merchants -knew, as a matter of course, that they were selling (or consigning) for undisclosed principals and this imputed knowledge was transplanted to English merchants who adopted similar roles when they were located in 'factories' abroad or when they were in possession of the goods of 'foreigners' in England, for the purposes of sale or consignment.  As a result, it seems reasonable for the courts by 1484 (if not considerably before) to hold (in essence) that: 'If you deal with a factor, you may presume he has authority to sell his principal's goods or to deliver them for sale;'  This also reflected the practical realities of the situation since the principal would not have been physically present or easily available to confirm the sale. Also, he may have given instructions orally or in a different language. Further, the principal was, often, an important man unfamiliar with business -the reason why he was 'entrusting' his goods to this factor, to deal with them as he saw fit. As such, he accepted the risk his factor might be dis-honest or engage in sharp practice. Indeed, likely, this, sometimes, worked to the principal's advantage since business in those times was not known for moral scruples in practice.

(b) St German (1528) & Southcote v Bennet (1601)
St German, Doctor and Student (1528) terms of status -the merchant had a higher status to a factor who had a higher status to an apprentice. The key determinant of whether a person was a factor was whether he had his principal's goods in his possession with authority to dispose of the same. 120 Simple possession would only have made him a bailee; an authority to dispose as if he were the owner made him a factor.

(c) Position by the 17 th Century
From late Elizabethan and Jacobean times there was a great increase in English trade and from an analysis of the early caselaw, it is possible to determine that factors principally acted for:  Foreign merchants -selling their goods in England; 121  English merchants -exporting their goods abroad and selling them; 122  Farmers (especially those producing corn) 123 -who sent their goods from the countryside and needed a town agent to sell them on their behalf (or for the agent to consign them to others for sale);  Those in the wool and textile trades 124 -who sent their goods from the countryside and needed a town agent to sell them on their behalf (or for the agent to consign them to others for sale).
In conclusion, by the 17 th century, the common law upheld the ostensible authority of a factor to:  sell his principal's goods -including selling in his own name;  sell such goods on reasonable credit (at such time and price he thought best for his principal);  receive payment from the sale. 125 Such ostensible authority was subject to any express authority.

HISTORY OF THE FACTOR: 1775-1823 (a) Pledging of Goods
By the end of the 17 th century, the factor was not only, as a matter of course, selling the goods of his principal -he was acting as a banker to the same. This had also occurred in the case of the Italian fattore or local English merchants in medieval times, but, by the 17 th century, the volume of foreign imports/exports was very much greater than in medieval times. 126 Further, such lending was concentrated, in particular, in the corn and textile trades. Thus, the factor was lending money to his principal on the security of the goods he received. This was to the benefit to both parties since the principal got his money 'up front' and the factor earned a commission. The result was that it enabled the principal to survive, financially, prior to the sale of the goods. As to these trades: 120 Ibid, p 20 'The real test was simply that if a merchant consigned [gave possession of] his goods to man and gave that man directions for disposing of them, then the man was accounted the merchant's factor.' Also, p 20-1 'It is clear that proof of factorship rested not on appointment in writing but on a factor's actions. If a man acted for and in the name of a merchant, he was accounted the merchant's factor.' 121 For early cases see Gonzales v Sladen (1702) 125 McBain, n 12, p 11. Also, Pearson, n 3, p 7. Cf. Halsbury, n 14, vol 1, para 43 'The implied authority of a factor includes, subject to special instructions, authority: (1) to sell in his own name; (2) to sell on reasonable credit, and at such time and price as he may think beside for his principal; (3) to warrant; and (4) to receive payment when he has sold in his own name.' See also Martini v Coles (1813) 1 M & S 140 (105 ER 53) per Ellenborough CJ at p 147 'Where indeed a factor by the assent of his principal exhibits himself to the world as owner, and by that means obtains credit as owner, the principal will be liable who furnished the means; that was so decided before me at the Guildhall (De Leira v Edwards).' For caselaw on the factor by 1742, see C Viner, General Abridgment of Law and Equity (1 st ed, 1741-53), vol 13 (factor). 126 See Cunningham, n 21, pp 4-5 'The existence of taxation, as the chief means of defraying the expenses of the State, is pre-supposed in all the political economy of modern times. The requirements of the new system of finance forced statesmen to interest themselves in the development of national resources, the extension of commerce, and the prosperity of industry, far more seriously than was necessary in medieval times.'  Foreign Goods Imported. In the case of goods imported into England, pledging by factors (likely) arose as a result of the considerable wealth amassed by London merchants. In the absence of banks, they could afford to lend to foreign merchants, to enable the latter to export their goods to England, for them to sell as factor and both parties to reap large profits; 127  Corn & Textiles. In the case of local trade, thanks to improvements in the roads from the 17 th century 128 and the development of canals, 129 it was possible for local farmers to send their produce long distances, to London and other cities. This was especially so in areas such as the sale of corn. Also, in the textile industry or -rather -industries, since it comprised a number of trades which worked together to produce the finished cloth from the wool. 130 These industries were usually local cottage industries and very small, without access to credit in the absence of banks to lend. Thus, merchants, acting as factors, lent money on the security of the cloth. This enabled the textile industry to develop and expand greatly.
In the case of the textile industry, in Drinkwater v Goodwin (1775), Mansfield CJ noted that: the principal and factor enter into a special agreement, by which the factor undertakes and actually pledges his credit to raise money, for the benefit of the principal; which money is to be worked up into cloths, and which cloths when so worked up, the principal agrees to send to the factor. 131 Four other things the factor did:  Accepted Bills of Exchange ('BOE'). Instead of advancing money on goods pledged to him, the factor sometimes accepted BOE drawn against the goods. He would then sell the goods and use this money to pay the BOE when presented to him;  Goods Pledged with 3 rd Party. Sometimes, the factor did not lend money, himself. Instead, he pledged the goods the principal had sent to him. Then, after taking a commission, he paid the loan sum to the principal (the loan being re-paid when the factor sold the goods);  Del Credere. Sometimes, the factor acted as a guarantor (surety) for his principal, as to the payment of the price of the goods. He took a commission for this; 132  Insuring the Goods. Factors, often, undertook the responsibility of insuring the goods of their principals -charging a commission for the same.
Thus, in the 17 th century, the factor moved from being a person who bought and sold goods on behalf of his principal, to also being a financier (banker) in respect of those goods.  'to the intent that theire majesties subjects may not be oppressed by the said corporation by theire monopolizing or ingrosseing any sort of goods wares or merchandizes the said corporation to be made and created by this Act shall not att any time dureing the continuance thereof deale or trade or permitt or suffer any person or persons whatsoever either in trust or for the benefitt of the same to deale or trade with any of the stock-moneyes or effects of or any [wise] belonging to the said corporation in the buying or selling of any goods wares or merchandizes whatsoever and every person or persons who shall soe deale or trade or by whose order bank with more than 6 partners was allowed, 134 and by the fact that, in 1750, there were, probably, no more than 12 banks in London, with the first country bank to be regularly established in the north of England being in Newcastle in 1755. 135

(b) Malynes -Lex Mercatoria (1622)
Early legal dictionaries defined a 'broker' but not a 'factor.' Thus, the first edition of Cowell, The Interpreter (1607), did not define a factor. However, he defined a broker as deriving from the French 'broieur' being a grinder or breaker into small pieces: because he that is of that trade, to deal in matters of money and merchandise, between English men and strangers, does draw the bargain to particulars, not forgetting to grind out something to his own profit. 136 It also seems -at least in the cloth trade in the 17 th century -'brokers' began to call themselves 'factors', to dis-associate themselves from the former word which had become linked to the less reputable profession of pawn broking. 137 There was an absence of any legal text, in the early 17 th century, dealing with merchants, brokers or factors. However, Malynes, a merchant -in the first edition of his Consuetudo vel Lex Mercatoria or the Ancient Law Merchant (1622) -dealt with factors. 138 He stated: The difference between a factor and a servant consists chiefly in this, that a factor is created by merchants letters, and takes salary or provision of factorage: but a servant or an apprentice is by his master entertained, some receiving wages yearly, and some others without wages. A factor is bound to answer the loss which happens by overpassing or exceeding his commission; whereas a servant is not, but may incur his master's displeasure. For albeit that the Spanish proverb is, quien passa comission, pierde provision, that he that exceeds his commission shall lose his factorage. The case is altered long since by the custom of merchants, and now it is su bolca lo paga, his purse does pay for it. Factors therefore must be very careful to follow the commissions given them, very orderly and punctually: and because merchants are not able to prescribe everything so exactly unto their factors as is convenient, it behoves them to make good choice of the persons which they do employ, for their welfare depends on traffic… This good factor therefore may be trusted, and all commissions given unto him may be ample, with addition of these words, dispose, do, and deal therein as if it were your own; & this being so found; the factor is to be excused, although it should turn to loss, because it is intended he did it for the best, according to his discretion, which is and ought to be the truest director… 139 Malynes went on to make various observations in respect of factors and these were followed in subsequent legal dictionaries and trade directories as well as made their way into caselaw. 140 Blount, Glossographia (1674) defined a factor as: or directions such dealeings or tradeing shall be made prosecuted or managed shall forfeite for every such dealeing or tradeing and every such order and directions treble the value of the goods and merchandize soe traded for to such person or persons who shall sue for the same by action in the High Court. ' Jacob, in the first edition of his New Law Dictionary (1729), 142 defined the factor as follows: a merchant's agent residing beyond the seas, or in any remote parts, constituted by letter or power of attorney. And one factor may be concerned for several merchants, and they shall all run a joint risk of his actions. If the principal gave the factor a general commission to act for the best, he may do for him as he thinks fit, but otherwise he may not. Tho [ugh] in commissions at this time, it is common to give the factor power in express words to dispose of the merchandise, and deal therein as if it were his own, by which the factor's actions will be excused, tho[ugh] they occasion loss to his principal. 143 What is noteworthy is the statement of Jacob that, 'at this time' (i.e. in 1729), the tendency was for the principal to enter into an express agency ('to give the factor power in express words'). This reduced considerably the need to assert any ostensible authority at common law to sell or consign; contract now governed the matter. Jacob also stated: If a factor buys goods on account of his principal, where he is used so to do, the contract of the factor shall oblige the principal to a performance of that bargain, and he is the proper person to be prosecuted, on non-performance…if the factor has orders from his principal not to sell any goods but in such a manner, and he breaks those orders, he is liable to the loss or damage that shall be received thereby. And where any goods are bought or exchanged, without orders, it is at the merchant's courtesy whether he will accept of them, or turn them on his factor's hands. 144 When a factor has bought or sold goods pursuant to orders, he is immediately to give advice of it to his principal, lest the former orders should be contradicted before the time of his giving notice, whereby his reputation may possibly suffer…A factor shall suffer for not observing of orders, and no factor acting for another man's account in merchandise, can justify receding from the orders of his principal, tho[ugh] there may be a probability of advantage by it. 145 Jacob's definition was followed in Postlethwayt, Universal Dictionary of Trade and Commerce (1 st ed; 1751) 146 who also distinguished a factor from a servant. 147 Postlethwayt also expanded on the cases relating to factors as well as dealt, in detail, with factors residing abroad. Finally, Beawes, who was a merchant, in his Lex Mercatoria (1752) 148 stated: Of factors, supercargoes, and agents. All these denomination import and signify the same thing, in regard of their function, though different in the method and place of discharging it, and is always understood to be one who acts for another, and who buys, sells, and negotiates, in conformity with the order of his 141 T Blount. Glossographia (1 st ed, 1656; 4 th ed, 1674)(factor). Blount did not define a broker. Cf. T Blount, A Law Dictionary and Glossary (3 rd ed, 1717) which defined a broker but not a factor. For some chancery cases on factors in the 17 th century, see DEC Yale, Lord Nottingham's Chancery Cases, SS, vols 73 and 79. 142 G Jacob, A New Law Dictionary (1 st ed, 1729)(factor). Jacob also defined a 'broker' as 'broccatores, broccarii & auxionarii are those that contrive, make and conclude bargains and contracts between merchants and tradesmen, in matters of money and merchandise, for which they have a fee or reward…The original of the word is from a trader broken, and that from the Saxon broc, misfortune, which is often the true reason of a man's breaking; so that the broker came from one who was a broken trader [merchant] by misfortune, and none but such were formerly admitted to that employment; and they were to be freemen of the City of London, and allowed an approved by the lord mayor and aldermen, for their ability and honesty.' 143 Jacob cited Malynes, Lex Mercatoria, see n 138. 144 Ibid. 145 See also J Montefiore, A Commercial Dictionary (1803) (factor) 'A factor is a merchant's agent or correspondent residing beyond the seas, or in any remote parts in this country, and, in some cases, constituted by a letter of attorney to sell goods and merchandise, and otherwise act for his principal, either with a stipulated salary or allowance for his care, or commission. He must pursue his orders strictly, and may be concerned for several merchants. In commissions given to factors, etc. it is customary to give them an authority in express words to dispose of the merchandise, and deal therein as if it were their own, by which the factor's actions will be excused, though they occasion loss to their principals. There is yet a fourth species of servants, if they may be so called, being rather in a superior, a ministerial, capacity; such as stewards, factors, and bailiffs: whom however, the law considers as servants pro tempore, with regard to such of their acts, as affect their master's or employer's property… 151 As for those things which a servant may do on behalf of his master, they seem all to proceed upon this principle, that the master is answerable for the act of his servant, if done by his command, expressly given, or implied; nam qui facit per alium, facit per se [he who acts through another does the act himself]. 152

HISTORY OF THE FACTOR: GENERAL LIEN -1755 (a) Introduction
Where the factor obtained (and retained) possession of specific goods of the principal on which he lent money he would take a pledge as security. However, the pledge only covered the loan in respect of those goods, whereas the factor wanted to secure all unpaid sums owed by the principal for all deals conducted with him. Thus, what was needed was a form of security that would cover a 'running account' of unpaid commission (factorage), viz: any:  unpaid commission arising from the sale, consignment or pledge of all goods the principal had placed with the factor;  unpaid commission arising from any loan the factor had given to the principal on all goods the principal had placed with him;  unpaid del credere commission (for guaranteeing the payment of the price of all such goods);  any commission for insurance placed by the factor.
The grant of such a security would enormously facilitate trade -especially, in industries such as the textile industry which comprised small tradesmen who were, otherwise, only paid when the cloth was finally sold.
 The maintenance of running accounts (fluctuating indebtedness) between a clothier and dyer was referred to in Dowman v Matthews (1721) and, doubtless, had long been practiced prior to that. However, it was the invention (in effect) of the general lien (the pre-cursor of a floating charge) in 1748 that got things going since it enabled a factor to retain one set of goods for other indebtedness owed to him by the principal in the same trade;  Further, it is unsurprising that nearly all general liens recognized by the courts were connected with the textile trade. stockbroking. 154 Further, both solicitors and bankers were closely involved in the textile trade in the 18 th century, helping to finance it . Finally, factors and merchants were involved not only in lending money but in establishing the first banks, as well as in insurance. In short, all these trades and professions were, or became, closely inter-related. As to the development of the factors' liens (particular and general) the following may be noted:

(b) Particular Lien
Quite when a factor was accorded a particular lien, for payment of his commission, is unclear. Liens had been accepted in the case of common callings from early times. Thus:  Common Callings. A common (public) innkeeper was obliged by law, to accept any traveller (wayfarer) who presented himself. 155 He also had strict liability imposed on him, by law, for loss or damage to the goods of that person when staying at his inn (which seems to have been first imposed c. 1368). 156 By way of compensation for these onerous responsibilities, the courts accorded the innkeeper a lien over the travellers' goods, if unpaid (this occurred by 1465 at the latest). 157 As for other common callings: o A common farrier was obliged to shoe the horse of any wayfarer who so demanded. He was also accorded a lien, if unpaid -though when this lien was first recognized is uncertain; 158 o A common carrier was accorded with strict liability by 1596 and a lien was recognized c.
1699. 159  Improving Goods. A person who worked on goods to improve them -such as tailor -was also accorded a lien. This may have been due to the fact that tailors, also, were 'common' in early times. That is, they were obliged to make clothes for any member of the public, if so required. 160 Or, it may have been the result of a concession by the English courts due to the fact that -like common innkeepers, farriers and carriers -tailors were often bilked (the party making off without payment) and, to prevent this, they were accorded a lien over the cloth, to hold on to it until payment. 161 Which lien came first -that of the innkeeper or the tailor -is unlikely to be known through lack of records.
As for the factor, he did not exercise a common calling. That is, he was not obliged to act as an agent for anyone who asked. Further, he did not improve the goods of his principal; he simply sold them etc. However, one suspects that the factor's particular lien arose because the textile trade involved many persons carrying on distinct processes, such as weavers, bleachers, fullers, dyers, calico printers and packers -all of which could be said to improve goods -and many factors were also involved in these trades as well as being clothiers (the person who sold the end product, cloth). 162 Thus, it is likely that qua packer, bleacher, fuller, dyer etc, factors were accorded with a particular lien. Whitaker, who wrote the first text on liens in 1816, stated: Factors have always, it seems, been entitled to a particular lien upon the goods of their principal coming into their possession in the course of their trade, for the charges incident to those particular goods. 163

(c) General Lien
As previously noted, in the textile industry in particular, the participants maintained running accounts among each 154 The only unconnected general lien to be recognised was the very last -that of a club trustee (in 1887) -and that lien is aberrant since it is a charge, rather than a lien. As to the involvement of merchants and factors in banks, Westerfield, n 123, p 384 'The prevalent custom of country merchants assuming the banking function was illustrated in divers businesses. Mansfield was a linen-draper, Cuming a cloth dealer, Alexander a tobacconist, Coutts a corn dealer, etc. The first country bank was the Old Gloucester bank founded by James Wood, a soap and tallow chandler. Another great London banking firm owes its origin to one Smith, a Nottingham draper, who develop a local banking business, extending to Preston, Hull, Lincoln, and finally London. The Liverpool bankers were originally general merchants, tea dealers, linen merchants, and one was a watch and clock manufacturer. The first country bank to be regularly established as such was at Newcastle in 1755. In light of their mercantile origin, it is apparent that the country banks performed an important service for country industry and trade.  165 Hardwicke LC upheld a general lien in favour of a packer who not only improved the goods (the cloth, by packing it) but who lent money on the same, with the goods being a pledge for re-payment;  Mansfield CJ was to later claim (in 1768) the reason why a general lien in favour of a packer was upheld in Ex p Deeze (1748), was due to the fact that the packer in that case was 'in the nature of a factor.' 166 This is, probably, a case of ex post facto rationalization, since it seems that a factor's general lien was upheld for the first time not in 1748 but in 1755, in Kruger v Wilcox (1755), 167 where Hardwicke LC stated: All the four merchants, both in their examination in the cause, and now in court, agree, that if there is a course of dealings and general account between the merchant and factor, and a balance is due to the factor, he may retain the ship and goods, or produce, for such balance of the general account, as well for the charges, customs etc. paid on account of the particular cargo. 168 However, by 1805, the courts became more cautious on recognizing general liens at common law -mainly due to their unfairness vis-à-vis other creditors who had no means of ascertaining them and yet who took subject to them. 169 As it is, in 1812, Whitaker noted that: wherever there is a course of dealings, and a general account between the principal and factor, and a balance is due to the factor, he has a lien upon all the goods of the principal in his hands, in the character of factor for such balance, without regard to the time when, or on account upon which he received them. He has his lien too, not only for money actually advanced to his principal, but also for the debt for which he is only a surety for him…The case, indeed, of a factor is that in which for the convenience of trade, from the nature of his employment, and with a view to encourage him to advance money upon goods in his possession, or which are to be consigned to him, 170 the right of lien appears to have been most favoured, and carried to the greatest extent. For it has been determined, that where a factor sells goods under a del credere commission, whereby he becomes responsible for the price, or where he is in advance for goods by actual payment, he has a lien on the price in the hands of the purchasers, though he has parted with possession of the goods; because though he has not the actual possession of the goods, yet as he has the power of giving a discharge or bringing an action, he has a right to retain the money in consequence of his lien, as much as a mortgagee has by the title deeds of an estate in his hands, though he is not in possession. Nor will this lien be defeated by proof that the factor knew at the time when he advanced the money to his principal, that the latter was in insolvent circumstances. 171 Whitaker also noted 6 instances where a factor had no lien over goods, viz: (a) after the death of the principal; 172 (b) where there was a special agreement (e.g. express agreement otherwise); 173 164

HISTORY OF THE FACTOR: 1823-89
In Baring v Corrie (1818) a definition of lien was given, one which was much cited later on. Abbott CJ stated: A factor is a person to whom goods are consigned for sale by a merchant, residing abroad, or at a distance from the place of sale, and he usually sells in his own name, without disclosing that of his principal; the latter, therefore, with full knowledge of these circumstances, [en]trusts him with the actual possession of the goods, and gives him authority to sell in his own name.
Abbott CJ also noted that: the broker is in a different situation; he is not trusted with the possession of the goods, and he ought not to sell in his own name. The principal, therefore, who trusts a broker, has a right to expect that he will not sell in his own name…In all the cases cited the factor was in actual possession of the goods, and the purchasers could not know whether they belonged to him or not. And at all events they knew that he had a right to sell the goods. But the case of a broker is quite distinguishable. 178 Uncertainty, however, prevailed over whether a factor had a similar ostensible authority to pledge.  Caselaw in 1742. In Paterson v Tash (1742), it was reported that a factor had no such authority -although, in 1816, Gibbs CJ thought this case to be mis-reported. 179 In 1823, a Select Committee of the House of Commons, at the urging of factors, 180 advised Parliament that legislation was requisite. 181 In particular, it recommended that it would not be unwise to adopt the principle of certain foreign laws that 'possession constitutes title' and that the law be altered to provide that: a person possessing a bill of lading, or other apparent symbol of property, not importing that such property belongs to others, shall be considered as the true owner, so far as respects any person who may deal with him, in relation to such property, under an ignorance of his real character. 182 173 Ibid, pp 108-9. Walker v Birch (1795) 6 TR 258 (101 ER 541) held that -if goods were deposited with a factor pursuant to a special agreement that he pay to the principal the proceeds on sale -he had no general lien on the goods (if not sold), the agreement overriding the lien the common law otherwise provided for. 174 176 Ibid, p 111 'According to the general rule of law with respect to liens where the goods of the principal do not come into the actual possession of the factor, he can acquire no lien upon them, even though he has accepted bills upon the faith of the consignment, and has paid part of the freight.' Kinlock v Craig (1789) 3 TR 119 (100 ER 487). 177 Ibid, pp 111-2 'As by the general rule of law that liens cannot exist without possession, the lien of a factor cannot attach on goods which do not come into his possession: so in conformity to the same rule, his lien cannot continue on the goods, so as to enable him to maintain trover for them at law, after he has parted with possession of them to his principal.' 178 2 B & Ald (106 ER 317) 137 at p 143. It may be noted that, in this case, the factor was also acting, at times, as a merchant. 179 2 Stra 1176 (93 ER 1110). 'It was held by CJ Lee, that though a factor has power to sell, and thereby bind his principal, yet he cannot bind or affect the property of the goods by pledging them as a security for his own debt…And the jury found accordingly.' See also Pearson, n 3, p 7; Report, n 6, p 5 and Pearson-Gee, n 13, pp 3-4. Ibid, p 5 for subsequent decisions until 1822. 180 There seems little doubt that the factors put great pressure on the Committee, to obtain the passing of the Factor's Act 1823. Crump, n 13, p 8 'By the exertions principally of the monied capitalists, Mr Paley tells us, whose interests were affected by the existing state of the law, in the year 1823 an Act of Parliament was obtained.' See also Paley, n 13, p 96. 181 Report, n 6. See also Munday, n 13, pp 246-7. 182 Ibid, p 21. It also noted 'This regulation, for the benefit of commerce, not to affect the right of the true owner to follow his goods while in the possession of his factor, or to recover the same from any persons having made advances thereon, upon payment of the amount of such advances; or, if previously sold by such person, to recover from him any balance in his hands beyond the amount of advances. Nor is any person taking a security for a prior debt due from a factor or agent, upon goods in the possession of such factor or agent, or of which he holds such symbol of property as is before mentioned, to acquire any greater interest therein than really belonged to, and might have been enforced by, such factor or agent.' This course of action -the creation of a statutory exception to the rule of nemo dat in the case of pledgewas opposed, in particular, by the eminent lawyer, Sir James Scarlett (1769-1844, Baron Abinger). 183 Butterworth (in 1902) stated: In 1823 an agitation was set on foot by London merchants, bankers, and brokers, with a view of obtaining an immediate alteration of the law, and petitions were presented to Parliament with that object. A Committee of the House of Commons was appointed to investigate into the law and practice of trade on the subject both at home and abroad; a great number of witnesses were examined, including many of the leading London merchants, and most of the British vice-consuls and commercial representatives on the continent; and the Committee issued a report strongly urging upon the house the necessity, in the protection of commerce, of an immediate change in the law. 184 This course was strenuously opposed by the legal members of the House, but in the same year, 1823, the first Factors Act was passed, and as its provisions were found not to afford sufficient protection, a second Act was passed in 1825, a third in 1842, and a fourth in 1877. It has been said that these Acts are 'monumental examples of bewildering legislation', and that the first three afford a model of the art of saying few things in many words; but as you are doubtless well acquainted with other excellent models of this art, and as all four Acts were repealed by the Factors Act 1889, you will be content, I trust, to forbear exploring those treasuries of perplexing verbosity. 185  Factors Act 1823. 186  doubted the expediency of altering the law on this subject. A great deal had been said about the situation of merchants and factors, but the truth was, that neither merchants nor factors were materially interested in the question. Those who stirred in this matter were the brokers, who were in the habit of advancing large sums of money on goods, without inquiring of those from whom they obtained them, whether they were their own property or not. By such practices they sometimes made great gains, but being exposed to occasional losses, they came to parliament to ask that they might be screened from the effects of their own imprudence by an alteration of the law of the land. He contended, that the evils under the law might be easily obviated.' See also R Winter, Objections to the proposed alteration of the law relating to Principal and Factor (1823). 184 He cited Pearson-Gee, n 13, pp 5-6. Ibid, Pearson-Gee, n 13, p 1 'The first Factors Act…was…the outcome of a prolonged struggle between the Parliamentary representatives of the commercial classes and the legal profession…as a consequence of which it was merely tentative in character, and had a very narrow scope.' 185 Butterworth, n 13, p 42-3. Chalmers (in 1945), n 17, p 182 'The first Factors Act was passed in 1823, the second in 1825, and the third in 1842. These enactments were a model of the art of saying few things in many words.' 186 4 Geo 4, c 83, s 1 (persons in whose names goods shall be shipped, shall be deemed to be the true owners so as to entitle consignees to a lien thereon in respect of their advances, or of money or negotiable securities received by the shippers to the use of the consignees, provided the consignees have no notice that the consignors are not the actual proprietors of such property), s 2 (any person may take goods or a bill of lading in deposit from any consignee, but such person shall not acquire any further right than the consignee possessed), s 3 (the right of the true owner to follow his goods while in the hands of his agent, or of his assignees in the case of bankruptcy, or to recover them from assignees, etc, upon paying his advances secured upon them etc). 187 Pearson-Gee, n 13, p 9 'The Act went a very little way. It altered the law as to pledging only in the particular case of consignments by sea. Under its provisions a consignee might acquire a lien upon the goods consigned to him for advances made, or securities given, to the consignor, and transfer the lien by a pledge of the goods, or of the bill of lading. 189 S 1 (factors or agents having goods or merchandise in their possession, shall be deemed to be the true owners, so as to give validity to contracts with persons dealing bona fide upon the faith of such property); s 2 (persons in possession of bills of lading etc to be the owner so far as to make valid contracts); s 3 (no person to acquire a security upon goods in the hands of an agent for an antecedent debt, beyond the amount of agent's interest in the goods), s 4 (persons may contract with known agents in the ordinary course of business or out of that course if within the agent's authority); s 5 (persons may accept and take goods etc in pledge from known agents, but in that case shall acquire no further interest than was possessed by such agent at the time of such pledge); s 6 (right of the true owner to follow his goods while in the hands of his agent or of his assignee, in the case of bankruptcy, or to recover them from a third person upon paying his advances accrued upon them and, in case of the bankruptcy of factor, the owner of goods so pledged and redeemed shall be held to have discharged pro tanto the debt due from him to o The main object [of the Bill] I take to be this; to enable agents and factors to raise money for their own use, or to pay their own debts, by making a binding and lawful pledge of the property of their principals, without their consent or authority; 192 o The proposed alteration of the law is not confined to the case of a factor entrusted with goods for sale; but extends to give an express legislative sanction to the fraud of every species of agent or servant whom it may be necessary to trust with the receipts of goods for any purpose whatever, and who may chance to find, as doubtless he always may find, a money-lender discreet enough to accept his pledge of the warrant or order for the delivery of the goods without pressing for any inconvenient information. 193 As it is -pledge cases under the 1889 Act (see 24(b)) -evidence that the second point of Scarlett was prescient. It enabled an errant factor and a moneylender who failed to make inquiry (or who was deliberately dishonest) to enable the goods of a principal to be encumbered by act of law even though the principal might have expressly prohibited any pledge of his goods. Further, as Scarlett pointed out, the grant of such a statutory power was not necessary for an honest agent since he would not pledge without authority. 194 Also, a pledgee (moneylender) could otherwise easily protect himself by requiring evidence of title to the goods (either indicating that they belonged to the factor) or by requiring sight of the agency agreement (expressly stating the principal's authority to the pledge of his goods). 195 As it was, the 1825 Act did not give a 'carte blanche' presumption of a factor's authority to pledge the goods of his principal -this did not result until the 1842 Act.  Factors Act 1842. This Act amended the Acts of 1823 and 1825. It also provided, in s 1 (bona fide advances to persons intrusted with the possession of goods or documents of title, though known to be agents protected).
from and after the passing of this act any agent who shall thereafter be intrusted with the possession of goods, or of the documents of title to goods, shall be deemed and taken to be the owner of such goods and documents, so far as to give validity to any contract or agreement by way of pledge, lien, or security bona fide made by any person with such agent so entrusted as aforesaid, as well for any original loan, advance, or payment made upon the security of such goods or documents, as also for any further or continuing advance in respect thereof; and such contract or agreement shall be binding upon and good against the owner of such goods, and all other persons interested therein, notwithstanding the person claiming such pledge or lien may have had notice that the person with whom such contract or agreement is made is only an agent. 196 (underlining supplied) The words underlined connote the heart of the provision. bankrupt); s 7 (agents fraudulently pledging the goods of their principals deemed to be guilty of misdemeanour); s 8 (Act not extend to cases in which the agent has not made the goods in security for any sum beyond the extent of his own lien); s 9(Act not lessen any remedy at law or equity which the party aggrieved may be entitled to adopt). 190 See Pearson-Gee, n 13, pp 9-10; Pearson, n 3, pp 11-2,  Factors Act 1877. This Act, s 2, clarified the position in respect of the revocation of an agency. 197 It also included new subject matter which did not relate to agents in particular but to buyers and sellers in general. Thus ss 3-5 dealt with sellers in possession, buyers in possession and stoppage in transit:  Section 3 (vendors permitted to retain documents of title to goods). 'Where any goods have been sold, and the vendor or any person on his behalf continues or is in possession of the documents of title thereto, any sale, pledge, or other disposition of the goods or documents made by such vendor or any person or agent entrusted by the vendor with the goods or documents within the meaning of the principal Acts as amended by this Act so continuing or being in possession, shall be as valid and effectual as if such vendor or person were an agent or person entrusted by the vendee with the goods or documents within the meaning of the principal Acts as amended by this Act, provided the person to whom the sale, pledge, or other disposition is made has not notice that the goods have been previously sold.'  Section 4 (vendees permitted to have possession of documents of title to goods). 'Where any goods have been sold or contracted to be sold, and the vendee, or any person on his behalf, obtains the possession of the documents of title thereto from the vendor or his agents, any sale, pledge, or disposition of such goods or documents by such vendee so in possession or by any other person or agent entrusted by the vendee with the documents within the meaning of the principal Acts as amended by this Act shall be as valid and effectual as if such vendee or other person were an agent or person entrusted by the vendor with the documents within the meaning of the principal Acts as amended by this Act, provided the person to whom the sale, pledge, or other disposition is made has not notice of any lien or other right of the vendor in respect of the goods.'  Section 5 (transfers of documents of title).'Where any document of title to goods has been lawfully indorsed or otherwise transferred to any person as a vendee or owner of the goods, and such person transfers such document by indorsement (or by delivery where the document is by custom, or by its express terms transferable by delivery, or makes the goods deliverable to the bearer) to a person who takes the same bona fide and for valuable consideration, the last-mentioned transfer shall have the same effect for defeating any vendor's lien or right of stoppage in transitu as the transfer of a bill of lading has for defeating the right of stoppage in transitu.'  Factors Act 1889. This repealed, and consolidated, the Factors' Acts 1823-77. 198 In, Cole v North-Western Bank (1875), Blackburn J, reviewing the Acts of 1823-42, stated: At common law, a person in possession of goods could not confer on another, either by sale or by pledge, any better title to the goods than he himself had. To this general rule there was an exception of sales in market overt, and an apparent exception where the person in possession had a title defeasible on account of fraud…[However] If the owner of the goods had so acted as to clothe the seller or pledger with apparent authority to sell or pledge, he was at common law precluded, as against those who were induced bona fide to act on the faith of that apparent authority, from denying that he had given such an authority, and the result as to them was the same as if he had really given it. But there was no such preclusion as against those who had notice that the real authority was limited. 199 This is not wholly accurate since the common law did not hold that a pledgor had ostensible authority in Paterson v Tash (1742) and this issue remained uncertain 200 until legislation clarified the matter -which only effectively occurred with the Factors Act 1842. Blackburn J continued as to what he thought the effect of 1823-42 Acts were: We do not think that the legislature wished to give to all sales and pledges in the ordinary course of 197 Ibid, pp 15-8 and Pearson, n 3, pp 12, 18-9 & 106-14. 1877 Act, s 2 'Where any agent or person has been intrusted with and continues in the possession of any goods, or documents of title to goods, within the meaning of the principal Acts [i.e. those of 1823-42] as amended by this Act, any revocation of his intrustment or agency shall not prejudice or affect the title or rights of any other person who, without notice of such revocation, purchases such goods, or makes advances upon the faith or security of such goods or documents.' 198 40 & 41 Vict c 39. See also Pearson, n 3, pp 106-14. Munday, n 13, p 248 'It has been pointed out that the Factors Act 1889 affords neither a satisfactory nor a successful instance of codification in that it failed to take the opportunity to simplify and clarify the law, but preferred to reproduce and, to some extent, extend the previous provisions. This error was further compounded in 1893 when, in the Sale of Goods Act, the legislature proceeded to re-enact, virtually unaltered, certain provisions of the Factors Act.' See also Gutteridge, Contract and Commercial Law (1935) 51 LQR at p 140. 199 LR 10 CP at pp 362-3 per Blackburn J. Ibid, p 364 'The general principle of law, that, where the true owner has clothed anyone with apparent authority to act as his agent, he is bound to those who deal with the apparent agent on the assumption that he really is an agent with that authority, to the same extent as if the apparent authority was real…'. See also Pearson, n 3, p 2. 200 See cases cited by Pearson, n 3, pp 4-6, 7-10. Also, Selwyn (1869), n 13, vol 1, p 733 'By the common law, a factor, as such, had not any authority to pledge, so as to transfer his lien to the pawnee, or to barter, but only to sell the goods of his principal.' business the effect which the common law gives to sales in market overt…The legislature seems to us to have wished to make it the law that, where a third person has intrusted goods or the documents of title of goods to an agent who, in the case of such agency, sells or pledges the goods, he should be deemed by that act to have misled any one who bona fide deals with the agent, and makes a purchase from or advance to him without notice that he was not authorised to sell or to procure the advance. 201 However, it should be noted that this statutory presumption of ostensible authority which Blackburn J divined in the 1823-42 Acts was wider than in the 1889 Act which required the sale, consignment or pledge having also to be in the 'customary course of his [the mercantile agent's] business.' Thus, caselaw on the 1823-42 Acts should be treated with considerable circumspection.

WHO WERE FACTORS IN 1823? (a) Persons Claiming to be Factors
It is also important to note who were the persons claiming to be factors in 1823. That is, persons who asserted that -by custom of trade -they might sell (or consign) the goods of others, without the need to obtain the express, or (i) capitalists. 205 In the case of the corn trade, for example, the following was stated: The most eminent corn merchants and factors concurred in stating the vast amount of capital continually advanced on consignments from Ireland, as well as from various parts of Great Britain, large quantities of corn being always stored in the warehouses of London, Liverpool, Bristol and other ports, to wait for favourable markets; and although the sales, when made to dealers, are not at such long credits as on some other articles, the consignees [factors] are generally drawn upon at such short dates, before the corn arrives, that their accumulated advances are very heavy, and in general long continued before they can obtain a reimbursement from the sales. From Ireland, shipments appear to be continually made, at Waterford, Cork, Limerick, and other ports, on account of houses in Dublin or other places; the shippers draw on the consignees, when they transmit the bills of lading, for two-thirds or three-fourths of the value, and it is impossible for them to ascertain in most cases, who is the owner; frequently the same shipment belongs to two parties, residing in different parts, or the property changes hands after shipment, and disputes consequently arise, which involve the security on which the corn merchant or factor has advanced his money. In the evidence, and reported cases, given in the Minutes and Appendix, the Committee have recorded some remarkable cases, to show the manner in which corn-factors have had their securities on this description of property taken from them, in a way which no prudence or precaution could have guarded against…' 206 Thus, in these cases, the factor was financing the shipment of the corn from Ireland, often, on extended credit (that 201 LR 10 CP at p 372 per Blackburn J 202 See n 6. 203 On the East Indies trade, see also Cunningham, n 21, pp 463-71. 204 Ibid, pp 473-4. 205 According to one estimate made in 1834, more than two thirds of the entire trade of Great Britain (both imports and exports) were handled by factors. 206 Report, n 6, p 12. It also noted 'The seed, butter, and provision trades, which are carried on to so large an extent with Ireland, are conducted on the same principles, and appear to be liable to the same losses, arising from irregular dealings, or changes of ownership. is, not selling the goods until a considerable time after extending the loan). Today, things are wholly different.  There is containerisation of goods so it is clear what shipment belongs to whom. Further, it is banks, under (wholly standardised) letters of credit, who finance shipments. Thus, the factor is not extending credit on the goods. Further, the bank will only release payment, enabling the import of the goods, if the relevant shipping documents (bills of lading etc) are in order;  Also, the bank has a general lien (a banker's lien) 207 which it can exercise against its client (the importer) should the client not pay off the loan via the sale of the shipped goods or otherwise.
The evidence of the silk trade, was that: the bulk of it is sent by merchants residing in the sea ports of Italy, and other countries where it is cultivated, to be sold by their correspondents in London, for the account of the shippers, who generally draw in anticipation for a large proportion of the value, long before the sales can be effected; and that when sales are made, they are made to the manufacturers and dealers on so long a credit, that the British merchants are frequently in cash advance for a space of six, nine or twelve months, to the extent of two-thirds or three-fourths of the whole value imported of this costly article. But it was proved by the witnesses, and corroborated by the testimony of an extensive shipper from Italy, that a large proportion of the whole belonged to a variety of persons residing in different towns and villages in the interior of Italy, to whom the shippers in the sea ports were in the habit of making advances, when they received the silk to forward to England. That these shippers had frequently five or ten properties included in the same bill of lading, and that it would be utterly impracticable to separate each property, and state the amount advanced by them on each, in such a way as to satisfy their correspondent in this country, who ought to be secured by the whole quantity of silk in hand, for the total amount of his advances thereupon. 208 In the East India trade, the evidence was that goods (cottons, spices, indigo etc) from India often lay in English warehouses for months or years, awaiting a favourable sale. 209 Further, the importers often advanced money, which they borrowed from banks in England (so-called, capitalists) by giving the banks East India warrants as security (these warrants comprised transfers of property in the shippers' warehouses). These warrants were treated as negotiable (like BOE). However, by 1823 the evidence was that banks not were prepared to advance money on East India warrants 'in consequence of the insecurity supposed to attach to them.' 210

(b) Conclusion
The proposal of factors (and the Committee) for legislation to be enacted to recognise that factors had -as a presumption of law -ostensible authority to pledge goods (and documents of title) qua owner, was useful to factors. However, it left principals at the mercy of unscrupulous factors. As it is, ostensible authority to pledge was only recognised, in full, in the Factors Act 1842 and, by then, things were changing anyway. The heart of the problem was that the factor had too many roles. He was acting, in many cases, as the person: (a) in possession of the goods of another as agent, for on-sale; 211 (b) lending on those goods (and taking a pledge as security); (c) guaranteeing the price of those goods (del credere); (d) insuring those goods; (e) sometimes, shipping those goods; (f) pledging those goods to banks and to brokers, to pay off his commission and the principal; (g) consigning goods to others for sale.
Further, factors were often, also, acting as merchants and brokers. As it is, as history relates, banks took over (b) and (f), and (c) became obsolete. Insurance brokers took over (d) and shipping companies (e). Thus, despite the great furore in 1823 to obtain a change in the law re pledge, the reality was that, soon, factors were wholly eclipsed 207 See 7(a). 208 Report, n 6, p 13. The wool trade (mainly imports from Spain and Germany) was conducted on the same basis. Ibid, p 14. In the case of the cotton trade (mainly cotton imported from America via Liverpool) the factor was, himself, borrowing from other brokers in England, in order to finance the shipment from America. Ibid. 209  by banks in lending (the latter had more capital and could offer better rates). The rationale for the factor being accorded a general lien also decreased -since it was predicated on his acting qua banker to the principal. In any case, after 1805, 212 the English courts were much more reserved about permitting general liens at the common law, since they prejudiced third party creditors. Finally, the courts were not prepared to accept anybody as a factor (mercantile agent) for the purpose of the 1842 Act. Thus, in:  Monk v Whittenbury (1831). 213 A wharfinger was not held to be a mercantile agent within the 1842 Act. It is clear Abbott CJ would also not have been prepared to hold that a carter (common carrier), warehouseman or packer was, either; 214  Heyman v Flewker (1863). 215 Willes J excluded as mercantile agents mere servants, caretakers or one who has possession of goods for carriage, safe custody, or otherwise, as an independent contracting party; but only persons whose employment corresponds to that of some known kind of commercial agent, like that class (factors) from which the Act has taken its name. 216 In this case, pictures were deposited by the defendant (D) with one Inman (whose usual business was acting as an insurance agent) with instructions then (or subsequently given) for their sale on commission. 217 It was held that Inman came within the 1842 Act. That is, he was a factor (albeit, 'one-off'). Thus, D was bound by a pledge bona fide of the goods made by Inman, without authority, with the plaintiff -an innocent third party. Willes J accepted it might be that 'this is a hard case'. 218  It is asserted this case was wrongly decided, since there was no evidence the 'usual business' of the agent (Inman) was to sell pictures. Rather, it was to sell insurance, as Willes J accepted. 219 The problem was that the 1842 Act, s 1 failed to refer to the agent having 'in the customary course of his business as such agent authority…to raise money on the security of goods', 220 an error which the 1889 Act, s 1 corrected, by adding such wording. Thus, the 1842 Act -because it was not well drafted -greatly extended who could be a factor. It could (if widely interpreted, as Willes J did) comprise any agent in commerce who had possession of another's goods even though possession in the instant case did not relate to his customary course of business; 221  Thus, it is asserted the correct decision should have been to hold that Inman was not a factor, merely a simple agent. Certainly, holding an ad hoc agent -not even acting in the customary course of his business -to be a factor, went against hundreds of years of precedent. Unfortunately, this decision was to be cited in 20 th century cases without noting this; or that the wording in the 1842 and 1889 Acts was distinct; 212 For the only liens after 1805, see 7(a). 213 2 B & Ad 484 (109 ER 1222)(a wharfinger having received flour in that capacity and without authority to sell, sold it to a purchaser who had no knowledge of his lack of authority). 214 Ibid, p 486 'If a wharfinger were so considered, it would be impossible to say that a carter, a warehouseman, or a packer was not…'. (2) Agents with whom goods are deposited for safe custody, as e.g. bailees, wharfingers and warehousemen.
(3) Agents who are employed in the carriage of goods, as e.g. carriers or forwarding agents.' 217 Inman was not a broker since he was given possession of the goods and the general distinction between a broker and a factor, in those times, was that the latter had possession of the goods (or documents of title), but not the former. 218 13 CBNS 519 (143 ER 205) at p 527. 219 Ibid, p 526 'it was no part of his ordinary business to sell goods on commission.' 220 See text to n 196. Cf. the recital to the 1842 Act 'usual and ordinary course of business.' 221 Thus, Willes J stated, at p 528 'The employment of Inman did strictly correspond, though in a small way, to that of a factor, because the defendant did not merely entrust him with the possession of the goods for safe custody, but employed him to sell the goods so entrusted to him upon commission.' The reference to commission is irrelevant in any case, since a broker also received a commission. Further, the flaw in the analysis was that possession was not given to Inman qua insurance agent.  (1868). 222 The plaintiffs (wine merchants) consigned to P (a factor) casks of sherry. He pledged them to the defendants after his authority was revoked. This time, Willes J held that P was not a factor, his authority having been revoked. Thus, there was no valid pledge. 223 o This case, effectively, contradicted Willes J's own decision in Heyman v Flewker (see above) which was not cited in it and where the factor also had no authority to pledge (it may be noted that his decision also produced uncertainty whether the 1842 Act only applied to a factor entrusted for the purpose of effecting a sale not yet made, see Vickers v Hertz (1871) 224 and Cole v North-Western Bank (1875)). 225 In conclusion, Heyman (1863) held, anomalously, that a person could be a factor even when: (a) acting on a  'one off' occasion; and (b) selling goods not part of his usual business (selling pictures, not insurance).

LEGAL TEXTS IN THE PERIOD 1821-89
After the legal text of Whitaker (1812) (last ed, 1869). 231 This text defined the factor, as well as adverted to the distinctions between the same and a broker (see App A). It also noted that 'the character of factor and broker is, in practical business, frequently combined'. 232 Such a statement was unsurprising, since the Municipal Corporations Act 1835 had removed any final restrictions on brokers. The text also referred to the Factors Act 1842 and cases thereunder. 233 Finally, it referred to the factor's lien and the (few) cases on the same, most of which were dated; 234  Russell, Treatise on Mercantile Agency (1873). 235 A useful analysis, this text was superceded, in part, by the Factors' Act 1877; (1823 to 1877)(1884). 236 This contained the texts of the Acts as well assome useful commentary on the history of pledging by factors prior to the 1823 Act. Acts 1823, 1825, 1842 and 1877.

POSITION OF FACTORS BY 1889
Factors were very much a creature of their time and, prior to analysing the present day provisions of the 1889 Act, the following general observations may be made:  Changing Role. Factors had acted as proto-bankers. Rich merchants -especially in the 18 th century, when there were few banks -were not only selling the goods of others, they were lending money on the security of such goods (or documents of title to the same). Also they were insuring them, guaranteeing the price of them (del credere) and procuring others to lend on the security of them, in many instances. Due to such lending, they were accorded a general lien; o However, by the 19 th century, factors were supplanted by banks and had returned to their primary role of selling the goods of others. In this, they were no different to brokers, save they had possession of the goods (or documents of title) and they were, usually, undisclosed (though they did not have to be, to be a factor);  Textile Trade. The factor had been particularly prevalent in the textile trade. By the 19 th century, the separate trades of weaver, bleacher, fuller, calico printer, dyer, packer and clothier were dying out, as a result of machines and automation taking over this work (especially, the textile mill). In compacting the process, the distinct general liens for these trades became obsolete. Further, the factor no longer lent money and he needed (or permitted) no extensive 'running balance', since cloth could be produced, sent out and sold much more quickly.
o This explains why no cases (it seems) have arisen on the factor's general lien after 1889. Indeed, liens generally were rarely relied on by the 20 th century (credit not being extended on the security of goods and there being developed floating charges etc), which help explain why there were no treatises on liens after Ashburner (in 1911); 237  Categories. After the Municipal Corporations Act 1835 opened up trade to everyone, 238 the term 'merchant' faded away since there was no need to distinguish a 'merchant' from a shopkeeper, market trader, wholesaler or retailer. Further, restrictions on brokers in cities and towns (which restrictions were generally obsolete in any event) also ended. As a result, reference to 'factors' and 'brokers' moved to become a general reference to an 'agent.' Indeed, the only real distinction between the two was that a factor was a particular type of agent with additional privileges resulting from the 1889 Act, since a person calling himself a 'broker' could also possess the goods of the principal.
The result of all this is that the 'factor' became less and less relevant to distinguish one agent from another and this is reflected in the fact that the 1889 Act was rarely availed of. As to legal texts, after the 1889 Act, there were:  Blackwell, The Law relating to Factors (1897). 239 This work was more substantive than prior works. However, it has become dated; of bills for the price, and by an entry being made in the factor's books to the debit of the one party, and the credit of the other. There are two kinds of factors, namely, home factors, and foreign. With us, a man is called a home factor, when both he and his principal reside in this country, whilst, on the other hand, a foreign factor is said to be one who, whether residing in England or abroad, is commissioned by a principal belonging to a different state or country from that in which the factor himself resides.' 236 See n 3. 237 After Ashburner, there were no more treatises on liens. This continues to this day, with the exception of two minor works, LE Hall, Possessory Liens (1917) and A Silvertown, Law of Lien (1988). Apart from Halsbury, the law on liens (and liens of factors in particular) has been given little attention in works of commercial law from 1911 until to date. 238 The Municipal Corporations Act 1835, s 14,''And whereas in divers cities, towns, and boroughs a certain custom hath prevailed, and certain byelaws have been made, that no person, not being free of a city, town, or borough, or of certain guilds, mysteries, or trading companies within the same, or some or one of them, shall keep any shop or place for putting to show or sale any or certain wares or merchandize by way of retail or otherwise, or use any or certain trades, occupations, mysteries, or handicrafts for hire, gain, or sale within the same' be it enacted, that notwithstanding any such custom or bye law, every person in any borough may keep any shop for the sale of al lawful wares and merchandizes by wholesale or retail, and use every lawful trade, occupation, mystery, and handicraft, for hire, gain, sale, or otherwise, within any borough'. 239 (1897-1911). 240 Although it dealt with factors, it had very little to say besides noting that a factor had a general lien against his principal on goods or securities entrusted to him for sale.

 Ashburner, A Concise Treatise on Mortgages, Pledges and Liens
Thus, the law on factors, from that time until today is scant. The best sources are Halsbury, Statutes and Laws, 241 Goode, 242 Chitty and Bowstead. 243 Against this background, the 1889 Act will now be considered, it being enacted much the same time as the category of 'factor' was in decline. 244  The former factor constituted an established species of agent but this species is now extinct in commerce and the FA [Factors Act] has to be applied to situations of much more casual agency, such as that of a motor car dealer obtaining offers for a customer. 246 Apart from these, other cases under the Act have been those of 'small time' commission salesmen -often, in 'one off' (ad hoc) situations of agency -contrary to the prior law on the factor. In all these cases, it would have been better if the 1889 Act had not existed, since the SGA 1893 and the common law on agency (express, implied, ostensible) would have dealt with the fact situations much flexibly instead of judges seeking to squeeze them within the narrow compass of the 1889 Act, s 2.

FACTORS ACT 1889 & SGA 1979
The 1889 Act contains three sections (sections 8-10) which deal with dispositions by sellers and buyers of goods, taking these from 1877 Act (see 8). In an example of statutory duplication -Gutteridge termed it a 'rare example of double legislation' 247 -these sections were replicated in the Sale of Goods Act 1893 ('SGA 1893'), s 25. They were repeated in the successor to the same, the Sale of Goods Act 1979 ('SGA 1979'), ss 24 and 25.

(a) Seller remaining in Possession
The 1889 Act, s 8 states: Where a person, having sold goods, continues, or is, in possession of the goods or of the documents of title 240 Ashburner, n 12, p 76. It also noted 'He does not cease to be a factor, and, as such, entitled to a general lien, because he is bound to sell in the principal's name and at a price fixed by the principal.' Ashburner cited Stevens v Buller (1883) 25 Ch Div 31. This is the last case also cited by Halsbury, n 14, vol 3(2), para 430. 241 Halsbury, n 14, vol 1, para 12 'Amercan tile agent is one having, in the customary course of his business as such agent, authority either to sell goods, or to consign goods for the purpose of sale, or to buy goods, or to raise money on the security of goods.' 242 At times, Goode is too summary, n 3, p 460 'The common law…developed the general principle that if the owner of goods entrusted them, or documents of title to them, to a professional dealer, a mercantile agent, he took his chance on the dealer's integrity and could not complain if in selling the goods the dealer exceeded his authority.' This fails to distinguish between the factor and the broker. And, that factors were not just professional dealers per se, but dealers whom, in the customary course of their business, would have possession of goods for undisclosed principals. 243 See ns 18 & 19. 244 Munday, n 13, p 250 'The passing of the Factors Act 1889 coincides approximately with the period which witnessed the decline of the factor. A number of considerations may account for his apparent demise from the commercial world. Improved means of communication and speedier methods of transport bringing buyer and seller closer together, along with the increased standardisation imposed upon manufactured goods have been suggested to have played a significant part in eroding away the importance of the factor. The advent of alternative forms of credit insurance and bankers' confirmed credits has already been mentioned as contributing towards the reduced financial role played by the factor. But of comparable importance are the new forms of business organisation which industrialisation has brought in its train. The trend towards larger units has meant that, although much business is still conducted on commission, manufacturers have often tended to purchase raw materials in bulk from the original supplier rather than passing through the middleman. to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of the goods or documents of title under any sale, pledge, or other disposition thereof, or under any agreement for sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of the previous sale, shall have the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the same. 248 An identical provision is to be found in the SGA 1979, s 24, save for the exclusion of the words underlined. Ashburner (in 1897) said of the same section in the SGA 1893, s 25(1), that it was 'a repetition' of the Factors Act 1889, s 8. 249  As it is, the SGA 1893 and the SGA 1979 were passed subsequent to the 1889 Act. Thus, it is clear that Parliament prefers the wording in the 1979 Act to the wording in the 1889 Act, s 8. Further, it would seem there has never been a case on the additional (underlined) wording. Thus, if s 8 is repealed, this will be no loss;  In any case, the wording in the SGA 1979, s 24 (which is intended to protect an innocent third party rather than a buyer who lets another (the seller) retain possession), could be improved, with the final words 'making the delivery or transfer were expressly authorised by the owner of the goods to make the same' being replaced by the words 'making the delivery or transfer were the owner' which is, actually, the purport. That is, a seller in possession is to be treated the same as the owner, in law, if he makes such a disposition to an innocent third party.

(b) Buyer obtaining Possession
The 1889 Act, s 9, states: Where   254 it was noted that the buyer of the goods did not have to be a factor (mercantile agent). However, the effect of the reference to a mercantile agent, the court considered, meant that such a transaction by the buyer would only be validated if the buyer was doing something that would constitute acting in the ordinary course of business as if he were a mercantile agent. However, this is unduly restrictive, today, and it is due to the section first having been in Victorian legislation relating to factors. The result is that an innocent third party could lose out in circumstances where this would not happen if it was a case of a seller in possession under s 8 -an anomalous situation which cannot have been intended. One would suggest that the real problem is the poor drafting of the Factors Act 1889 (viz. s 9 should have mirrored s 8 to a better extent).

(c) Effect of transfer of documents on vendor's lien or right of stoppage in transitu
The 1889 Act, s 10, states: Where a document of title to goods has been lawfully transferred to a person as a buyer or owner of the goods, and that person transfers the document to a person who takes the document in good faith and for valuable consideration, the last-mentioned transfer shall have the same effect for defeating any vendor's lien or right of stoppage in transitu as the transfer of a bill of lading has for defeating the right of stoppage in transitu. 255 A similar provision is to be found in the SGA 1979, s 47(2), which states: Where a document of title to goods has been lawfully transferred to any person as buyer or owner of the goods, and that person transfers the document to a person who takes it in good faith and for valuable consideration, then - It seems clear that s 47(2)(a) was not intended to make any substantive change to s 10. Thus, it simply repeats it, with minor grammatical changes. Section 47(2)(a) is also more clear.

(a) Definition of Mercantile Agent -Excludes Private Person or Employee
Section 1 states that, for the purposes of the Act, the expression 'mercantile agent' means: a mercantile agent having in the customary course of his business as such agent authority either to sell goods, or to consign goods for the purpose of sale, or to buy goods, or to raise money on the security of goods.
This definition is tautologous, 258 in that a 'mercantile agent' is defined as the same, albeit one with authority to:  sell goods;  consign goods for the purpose of sale;  buy goods;  raise money on the security of goods (including by way of a pledge, mortgage or charge).
As to who is a factor (mercantile agent) under the 1889 Act, this excludes a private arrangement 259

(b) Mercantile Agent -Ad Hoc Agent
Halsbury also notes that a 'mercantile agent' under the 1889 Act includes an agent even though he: (a) has only one customer; or (b) no general occupation as an agent; or (c) is acting as an independent dealer: 265 An example cited is:  Lowther v Harris (1927). 266 The plaintiff (L) wanted to sell some household goods. L took a house some minutes distant from P's two antique shops and stored the goods there. P was allowed to live in a flat on the top floor of the house and to use a room on the floor below as a sitting room. P used to bring customers from his shop to see the goods. P was given no authority to sell without L's permission. When P brought customers to see the goods, they dealt with him and had no knowledge of L. P falsely represented to L that he was able to sell certain goods (a tapestry) to W for £525 and obtained L's consent to the sale. However, P then sold it to H for £250, who was told by P that he was selling it on behalf of L. H acted in good faith and in the usual course of business, without notice of P's absence of title. Wright J, while accepting that a mere servant or shopman was not a mercantile agent within the 1889 Act, 267 held P to be a mercantile agent. In particular, Wright J noted:  also 24(b). 265 Halsbury, n 14, vol 1, para 12 'An agent may be a mercantile agent although he has no general occupation as an agent or he has only one customer, or though his general occupation is that of an independent dealer in the commodity to entrusted to him, provided that he acts in the transaction in question in his capacity as mercantile agent; but he must not be a mere servant or shopman. o Pictures (Tapestries). These, as objects of purchase and sale, constituted those who dealt with them on commission, mercantile agents within the 1889 Act. 269 However, it is asserted that, simply selling a picture on commission did not make a person a factor (mercantile agent). A broker also sold on commission and a shopman was not a factor even if he sold on commission. Thus, it would have been better if Wright J had simply concluded that tapestries comprised 'goods' as defined in the Act; o Possession of Tapestry. P had possession of it for the purpose of the 1889 Act, even if the same had been obtaining by fraud. 270 The difficulty with Lowther is that -save for Heyman v Flewker in 1863, see 9(b) which is also an aberrant caseis that it is very different from the conception of the factor in prior caselaw where -by nature of the trade in which the agent was engaged -as a matter of course, a third party could be held to assume the agent had authority to sell, consign or pledge.  That this should be presumed in the case of an antiques dealer selling outside his shop in an ad hoc agency -but not if within -created a supposed custom (as well as an anomaly) where none existed in 1927 and, almost certainly, none would be held to do so today;  Further, in Lowther, there was express authority to sell the goods, albeit not at that price. 271 Therefore, the case was, really, one of sale by an agent at an undervalue. He had authority to sell but not at that price.
Thus, the 1889 Act should not have applied and -although the sale would have been upheld in both cases -P should have been liable to L in damages, as an agent acting in breach of his authority. 272 The opinion of Wright J in Lowther, excluding a mere shopman from the Act, effectively, overturned earlier cases where a shopman was held to be a mercantile agent within the 1889 Act:  Turner v Sampson (1911). 273 The sale of a picture from his shop by a picture dealer, acting as an agent, passed title to a buyer in good faith under the 1889 Act -although the principal had expressly specified no sale should be made without his being referred to or a particular price was obtained. 274 The problem with the cases of Turner v Sampson (1911) and Lowther (1927) were that they were creating new categories of factor (mercantile agent) although the 1889 Act was only a consolidation Act and such categories would not have been so incorporated in the past since there was no evidence of there being a custom of an agent having the right to sell or pledge within such a trade, without a need to resort to the principal. This stretching of the 1889 Act has been pointed out by Goode: 268 Wright J cited Heyman v Flewker, see n 215. He also cited Hastings v Pearson (see n 260) and Weiner v Harris [1910] 1 KB 285 (an agent entrusted with goods (jewels by a jewellery manufacturer) on sale or return on terms that they were not to become his property and that his remuneration should be a share of the profits on sale is a mercantile agent. The agent had pawned them with a pawnbroker, without authority), see also 24(b). 269 Wright J cited Heyman v Flewker, see n 215. He also referred to Turner v Sampson (see text). 270 In respect of another tapestry which P sold, it was held that no possession had been given. 271 There is little evidence that L particularly wanted a sale to W. Rather, he wanted P to secure the sum of £525, regardless of the person sold to. Cf. Blackwell (writing in 1897), n 13, p 18 'If, for example, a principal directs the factor not to sell his goods below a certain price, but the factor does sell below the price fixed to a person who has no knowledge of the limitation placed upon the factor's authority, as between the third person and the principal, the sale will be good. But the principal will be entitled to sue the factor for the difference between the price fixed and what the goods actually sold for.

(c) Deemed Possession
The 1889 Act, s 1(2), states that a person: shall be deemed to be in possession of goods or of the documents of title to goods, where the goods or documents are in his actual custody or are held by any other person subject to his control or for him or on his behalf. 277

(d) Goods
The 1889 Act, s 1(3), states that goods includes 'wares and merchandise'. 278 However, a more modern definition is contained in the SGA 1979, s 61 which states: "goods" includes all personal chattels other than things in action and money, and in Scotland all corporeal moveables except money; and in particular "goods" includes emblements, industrial growing crops, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale; and includes an undivided share in goods.

(e) Documents of Title
The 1889 Act, s 1(4) states that 'documents of title' shall include: any bill of lading, dock warrant, warehouse-keeper's certificate, and warrant or order for the delivery of goods, and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented. 279

(f) Pledge
The 1889 Act, ss 1(5), states that the expression 'pledge' shall include: any contract pledging, or giving a lien or security on, goods, whether in consideration of an original advance or of any further or continuing advance or of any pecuniary liability. 280

1889 ACT, s 2 -POWERS OF MERCANTILE AGENT
The 1889 Act, s 2 (1), states the powers of a mercantile agent with respect to the disposition of goods: Where a mercantile agent is, with the consent of the owner, 281

(b) Exclusions from the 1889 Act
The Hire-Purchase Act 1964, part III, excluded from the 1889 Act private purchasers of vehicles on h-p or conditional sale, who have acted bona fide. Goode states: Part III of the Hire-Purchase Act 1964, as amended by the Consumer Credit Act 1974, regulates the rights of third parties who purchase motor vehicles while these are still comprised in a hire-purchase or conditional sale agreement. The broad scheme of Part III is that a disposition of a motor vehicle made by a debtor under a hire-purchase or conditional sale agreement is to be effective to transfer to a 'private purchaser' taking in good faith and without notice of the agreement such title as was vested in the person who had supplied the goods under that agreement. This is so whether the private purchaser takes direct from the debtor or through the medium of a 'trade or finance purchaser.' If the private purchaser is not an outright buyer but himself takes the vehicle on hire-purchase or conditional sale his possession is protected and he will acquire the original owner's title on completing his payments and (in the case of a hire-purchase agreement) exercising his option to purchase.
The statutory provisions contribute a substantial inroad into the common law rule nemo dat no quod non habet which has hitherto been the cornerstone of English hire-purchase law. It may be asked: why was no protection given to trade or finance purchasers? No doubt because Parliament thought they were well able to take care of themselves. There is available to them the Hire-Purchase Information Service. Whenever a car is offered to a trade purchaser or another dealer for sale, he at once wants to know whether it is on hire-purchase or not. If it is on hire-purchase, then he is not going to buy it until the title is clear. So it is a regular practice in the trade to telephone HPI and ask: 'Is this vehicle on hire-purchase or not? He then gets an answer on which he can safely act. 299

(c) Conclusion
As Dobson notes, it is possible -nowadays -for both private purchasers and car dealers to have checks carried out whether a car is subject to a finance agreement, has been a 'write off' or stolen. 300  arising under the 1889 Act are much less likely. More particularly:  The 1889 Act was not designed to cover car dealers since it could not (and cannot) be said that it was a usual custom (ordinary course of business) of that trade that its agents (car dealers), per se, had a right to sell, consignor pledge the goods of others of which they had possession as an agent simply by virtue of being a car dealer;  Today, many car dealers are employees (shopmen) rather than agents;  Unlike in olden times, where the principal was often difficult to contact or the agency depended on an oral agreement -or where it was difficult to identify the ownership of the goods a factor dealt with -today, a car dealer can easily contact the principal to secure his consent to a sale (or consignment or pledge) of his car. And, any agreement for a customer to sell his car is, invariably, in writing. Thus, the possibility of a car dealer mis-selling or mis-pledging a car, by accident, is much reduced.
In conclusion, the 1889 Act, s 2 is not required. Any sale (or consignment or pledge) by an agent is better governed by the general law (actual, implied or ostensible authority) -as well as the other exceptions to nemo dat contained in the SGA 1979, without the need to try and squeeze the fact situation into the confines of the 1889 Act. And, since the heart of 1889 Act is section 2 -along with definition of 'mercantile agent' in section 1 -and all the other sections are supplementary (and without direct caselaw), this means that the 1889 Act is no longer required. As to the other sections of the 1889 Act.

1889 ACT, s 3 -EFFECT OF PLEDGES OF DOCUMENTS OF TITLE
The 1889 Act, s 3, states: A pledge of the documents of title to goods shall be deemed to be a pledge of the goods.
This simply confirms that the documents are treated the same as the goods. 301 Halsbury notes that this section has no application where the pledge of the documents of title is by a person not a 'mercantile agent'. 302

1889 ACT, s 4 -PLEDGE FOR ANTECEDENT DEBT
The 1889 Act, s 4, states: Where a mercantile agent pledges goods as security for a debt or liability due from the pledgor to the pledgee before the time of the pledge, the pledgee shall acquire no further right to the goods than could have been enforced by the pledgor at the time of the pledge. (italics supplied) This considerably restricts the right of a factor to assert a pledge for an antecedent debt, something Whitaker noted in 1812. 303 Halsbury cites no caselaw.

1889 ACT, s 5 -RIGHTS ACQUIRED BY EXCHANGE
The 1889 Act, s 5, states: The consideration necessary for the validity of a sale, pledge, or other disposition, of goods, in pursuance of this Act, may be either a payment in cash, or the delivery or transfer of other goods, or of a document of title to goods, or of a negotiable security, or any other valuable consideration; but where goods are pledged by a mercantile agent in consideration of the delivery or transfer of other goods, or of a document of title to goods, or of a negotiable security, the pledgee shall acquire no right or interest in the goods so pledged in excess of the value of the goods, documents, or security when so delivered or transferred in exchange. 304 Halsbury  304 See also Halsbury, n 14, vol 1, para 149 (rights acquired by pledgee) 'In the case of a pledge of goods by a mercantile agent, the pledgee acquires a right to hold the goods against the principal for the full value of the consideration if the advance has been made in cash. If the goods are pledge to secure a debt due from the agent to the pledgee before the time of the pledge, the pledgee acquires no right to the goods beyond that which could have been enforced by the agent at the time of the pledge. Where, however, the goods are pledged in exchange for other goods, documents of title or negotiable securities, the pledgee acquires no right or interest in the goods so pledged in excess of the value of the goods, documents of title or negotiable securities at the time of the exchange.' consideration' for 'advance' (which section was intended to protect exchanges of goods and securities made in good faith and to alter the law as declared, in particular, in Taylor v Kymer (1832)). 305

1889 ACT, s 6 -AGREEMENTS THROUGH CLERKS
The 1889 Act, s 6, states: For the purposes of this Act an agreement made with a mercantile agent through a clerk or other person authorised in the ordinary course of business to make contracts of sale or pledge on his behalf shall be deemed to be an agreement with the agent. 306 Halsbury cites no cases on this provision which is, really, administrative in nature.

1889 ACT, s 7 -CONSIGNORS & CONSIGNEES -LIEN
The 1889 Act, s 7(1) states: Where the owner of goods has given possession of the goods to another person for the purpose of consignment or sale, or has shipped the goods in the name of another person, and the consignee [factor] of the goods has not had notice that such person is not the owner of the goods, the consignee shall, in respect of advances made to or for the use of such person, have the same lien on the goods as if such person were the owner of the goods, and may transfer any such lien to another person. 307 (italics supplied) Ss (2) states that nothing in s 7 shall limit, or effect, the validity of any sale, pledge, or disposition, by a mercantile agent. Halsbury cites no cases on this section which only applies to goods (not to documents of title) and where the consignee has no notice that the consignor (the shipper) is not the owner. 308 This section is unlikely to be invoked in modern times since it envisages a consignee (the factor) lending money on the goods to the shipper. 309

1889 ACT, s 11 -MODE OF TRANSFERRING DOCUMENTS
The 1889 Act, s 11, states, that, for the purposes of the Act: the transfer of a document may be by endorsement, or, where the document is by custom or by its express terms transferable by delivery, or makes the goods deliverable to the bearer, then by delivery.
Halsbury cites no cases on this section. 310

1889 ACT, s 12 -SAVINGS FOR RIGHTS OF TRUE OWNER
The 1889 Act, s 12, states:  Criminal & Civil Liability. 'Nothing in this Act shall authorise an agent to exceed or depart from his authority as between himself and his principal, or exempt him from any liability, civil or criminal, for so doing.'; 311  Bankruptcy. 'Nothing in this Act shall prevent the owner of goods from recovering the goods from an agent or his trustee in bankruptcy at any time before the sale or pledge thereof, or shall prevent the owner of goods pledged by an agent from having the right to redeem the goods at any time before the sale thereof, on satisfying the claim for which the goods were pledged, and paying to the agent, if by him required, any money in respect of which the agent would by law be entitled to retain the goods or the documents of title thereto, or any of them, by way of lien as against the owner, or from recovering from any person with whom the goods have been pledged any balance of money remaining in his hands as the produce of the sale of the goods after deducting the amount of his lien.'; 312  Set Off. 'Nothing in this Act shall prevent the owner of goods sold by an agent from recovering from the buyer the price agreed to be paid for the same, or any part of that price, subject to any right of set off on the part of the buyer against the agent.' 313 Halsbury notes that the terms of s 12 are negative and do not confer any positive right. 314

1889 ACT, s 13 -SAVINGS FOR COMMON LAW POWERS OF AGENT
The 1889 Act, s 13, states: The provisions of this Act shall be construed in amplification and not in derogation of the powers exerciseable by an agent independently of this Act.
Halsbury cites no cases in respect of this section.

ROLLS ROYCE v COX (1967)
The last successful case under the 1889 Act appears to have been St Margaret's Trusts v Castle (1964) (see 14(a)). Subsequent to this case, the word 'factor' has been preserved in the concept of 'factoring.' 315 However, this is a mis-nomer since there is an assignment of debts by one principal to another. Thus, there is no principal and agent relationship. Further, debts do not comprise 'goods' as defined in the 1889 Act. As for other subsequent cases relating to the factor 316 -in Rolls Royce Ltd v Cox (1967) 317 the court was not prepared to hold that salesmen, selling washing machines on commission, were factors. Denning MR stated: I am quite clear that these salesmen were not factors. The usual character of a factor are these: He is an agent entrusted with the goods of several principals, or sometimes only one principal, for the purpose of sale in his own name without disclosing the name of the principal, and he is rewarded by a commission…These salesmen…did not sell in their own names but in the name and on behalf of their principals…They were agents pure and simple, and not factors. Even if they were factors, however, there is a written agreement which is inconsistent with any lien. 318 Although it is not wholly correct that a factor sold in his own name (and he could still be a factor if he sold in the name of his principal in times past) 319 the dictum of Denning MR likely restricts the 1889 Act to agents acting for undisclosed principals. For his part Winn LJ stated: Whether or not a trader or dealer is a mercantile agent, or being a mercantile agent also a factor, is in my opinion…to be determined by that part of the common law which is properly to be called the law merchant. It is by custom of the business or mercantile world established in any given case by evidence that a court has to be informed whether a particular class of trader or dealer is a factor: there was no such evidence given in this case and there is, therefore, no support for a proposition, which in any case I should have found most surprising, that travelling salesmen are by reason of their possession of goods belonging to their employers, factors, with all the special characteristics, derived from status, not from contract which appertain to a class of dealers to which it is relatively unlikely in modern times that there will be any additions. 320 of 'owner' 334 as well as creating the curious situation of their client (which carried on the business of merchants, not factors) 335 being the bank's factor (mercantile agent);  Today -absent the 1889 Act -the issue would be one of interpretation of the relevant release and whether it permitted a pledge of bills only released for sale. 336 Likely, it would be held not, with no valid pledge to D being created, on the basis of nemo dat and S being a mere trustee of the bills.
All of (a)-(e) are cases of a party pledging goods without authority. They reflect the mis-givings of Sir James Scarlett (Baron Abinger) in 1823 that giving statutory ostensible authority to factors to pledge was giving legislative sanction to fraud. This is, to factors (mercantile agents) who were fraudsters and who might find moneylenders discreet enough to accept their pledges, without pressing for any 'inconvenient information. ' (see 8).
Certainly, (a)-(c) may be said to come close to this, and the case of Hastings v Pearson (1893) which held the opposite 337 in, hindsight, is much to be preferred, even when the cases were decided. Today, following Rolls Royce (1967), none of (a)-(e) would be likely be held to be a mercantile agent. Absent the 1889 Act, the general law -including implied authority (including any trade custom) and the doctrine of estoppel -would, almost certainly provide a more just outcome with the context of the specific factual matrix of the case.

REPEALING FACTORS ACT 1889
It is asserted the 1889 Act is long past its 'sell by' date, for the reasons set out in the introduction. Thus:  Categorisation. The 1889 Act -like prior Factors' Acts and the common law on factors -was predicated on certain distinct categories of persons, namely, 'merchants', 'brokers' and 'factors'. These categories no longer exist as identifiable (and distinct) groups of person, with their own specific legal privileges and restrictions. Instead, a more generic reference is made to 'principal' and 'agent' without the need to refer to the factor as an amplified agent. Also 'express', 'implied' and 'ostensible' authority at common law has superceded the 'actual' and 'ostensible' authority which the early law on factors developed;  No Factors Left. The description of 'factor' was by reference to trade custom. They were persons in particular trades where the general public dealing with them could (reasonably) be presumed to know, as a matter of course, that they were selling (or consigning for sale or pledging) goods not as their owner. Not least, because the factor himself (usually) had no idea who the owner was -due to the inter-mixing of the goods in question (corn, grain, textiles) or the fact that the principal was located abroad and difficult to identify (often, due to on-sales in the exporting country). Today, there are no such trades where such a presumption can, reasonably, exist as a 'matter of course'. In conclusion, the 'factor' is defunct -like the merchant and the broker. The issue, now, at general law is (and should be) one of agency;